Barclays Africa Group Ltd. is no more. And with that a chapter closes on its former British parent’s 100-year history on the continent.
The lender on Wednesday ditched the name to revert to Absa Group Ltd. as it severs ties with Barclays Plc after the London-based company sold down the controlling stake it bought in 2005. The Johannesburg-based company has already begun reorganizing its operations to further distance itself from the U.K. firm.
Absa Chief Executive Officer Maria Ramos, 59, in April refocused the lender around four divisions, retail and business banking, corporate and investment banking, rest of Africa and wealth management and insurance, in a bid to double its share of revenue from its African operations and regain market share in the South African retail market. The restructuring started with halving the number of executives at the retail and business banking unit last month.
"Barclays has been a very big brand in Africa, not in South Africa necessarily, but in the rest of Africa," said Adrian Cloete, a portfolio manager at PSG Wealth. "That means they’re going to have to spend more on their brand there when they brand back to Absa."
Barclays CEO Jes Staley cut the bank's stake in Absa down to below 15% as he sought to conserve capital and focus on rebuilding the company’s investment bank. Barclays can trace its history in South Africa back to 1919 when it bought National Bank of South Africa, giving it units across the continent. It quit the country in 1986, when it was the biggest lender in the country, as protests against racial segregation mounted.
The separation has reinvigorated Absa as an independent and stand-alone business, Ramos said earlier this year. It is now determined to build a digital business in pursuit of its growth targets, she said at a presentation in Johannesburg on Wednesday. It will look at strategic partnerships as well as targeted acquisitions and disposal in existing markets.
Ramos isn’t going empty handed after negotiating 765 million pounds ($1 billion) from Barclays for the investments needed in technology, rebranding and other separation-related expenses. The rollout of the Absa brand in South Africa will be completed in 2019 and extended to its units in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda and Zambia by mid-2020, the CEO said.
In the week leading up to the relaunch of the company’s brand, social media channels flashed teasers of a new look and feel that deviates from the brand’s signature red hue with warmer colors. It has also communicated the changes with clients in its operations outside of South Africa, where it has a presence in 12 African countries and retains the right to use the Barclays brand for two years.
At home, where the Absa brand never really left, the transition will be easier. Absa’s name is currently the country’s fourth most-valuable brand and is estimated by Brand Finance to be worth 18.9 billion rand ($1.4 billion), the lender said in a statement.
More than the brand relaunch, it will be the company’s ability to fulfill its ambition to retake its once-leading market position among South African consumers that investors will be watching closely, Cloete said.