Wednesday, October 4, 2023

Barclays Botswana working round the clock to dissolve panic on BAGL sell down

Barclays Plc’s sell down of its 62 percent stake in Barclays Africa (BAGL) seems to have spurred Barclays Botswana into making successive announcements in a bid to distance its operations from the UK Bank’s shareholding transformations.   

In a recent announcement Barclays Botswana makes reference to a statement contained in the 2016 first quarter (Q1) financial results of Barclays Plc which the UK Bank released on April 28 2016. The results cite the current shareholding changes, reiterating its initial message when the news broke. Barclays Botswana took to explaining a certain detail published on the results. “There is one technical point of detail in the PLC trading update which is worth commenting on. Now that Barclays PLC has announced its intention to sell down its interest in BAGL, the IFRS accounting standards require it to classify BAGL as a “discontinued operation” in its financial statements. This is simply a standard accounting term used to classify BAGL following their decision. It does not change the way Barclays Botswana operates or its financial reporting to the local market. It certainly does not change the substantive performance of Barclays Botswana business or its prospects for the future,” explained Barclays Botswana. 

Barclays Botswana has since the news broke vehemently advanced that its operational position will not be affected. The bank put it forward that Barclays Plc’s divestment was not out of loss of confidence in the Africa market, but rather to mitigate against the effects of recently introduced regulatory burdens specific and particular to Barclays Plc as a UK headquartered and globally significant financial institution. This stance was also supported by the Central Bank when it eased the panic asserting that Barclays Botswana remains a liquid and profitable company. 

The recent point of clarification by Barclays Botswana follows the announcement by Barclays Plc regarding the sale of its first tranche of shares in BAGL early this month.  A total of 103 592 491 ordinary shares (representing 12.2 percent of BAGL) were sold at a price of R13 053 million. The sale, which was attributed to a mix of existing and new investors, reduced the UK Bank’s shareholding to 50.1 percent. 

The sale, according to Barclays Botswana, was done following shareholder approval to reduce shareholding to a level which will permit accounting and regulatory deconsolidation.


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