The separation of Absa Group from the UK-based Barclays PLC is well on course. Absa Group is a banking institution based in South Africa and with subsidiaries across Africa. The bank split up program began in 2017 after Barclays PLC reduced its ownership in Barclays Africa.
The separation is a gradual process expected to last three years. It involves a step by step replacement of Barclays PLC operating systems and IT infrastructure with the operating systems of the South African based Absa group.
The break-up will also involve rebranding African businesses from the Barclays brand to Absa. Kenya’s Barclays Bank is one of the institutions expected to acquire the new identity by June 2020.
Absa informed investors that the separation process is 69 per cent complete. Citi is confident that the split will lead to a better outcome for Absa Group.
A report by the Citi research team states, “We believe that the separation gives Absa a significant competitive advantage not only to implement best-in-class technology but also as it forces the business to critically examine the entire cost base afresh.”
The report recommends a buy for the banking group as it expects the retail and corporate banking businesses to pick up.
Barclays Bank Kenya recorded a 12 per cent growth in pretax profit in the first quarter of 2019 to KSh3.5 billion. The bank’s customer deposits jumped up 16 per cent while loans and advances increased by 9 per cent.