The Bank of Botswana (BoB) has moved fast to calm the storm in the wake of jitters that ripped through the local banking sector following Barclays Plc’s announcement of its disinvestment from Barclays Africa Group Limited (BAGL). The Reserve Bank said in a statement last week that it will closely monitor events as they unfold at Barclays to ensure that it continues to deliver seamless services.
“Consistent with the BoB mandate as enshrined in the Bank of Botswana Act (CAP 55:01) and Banking Act (CAP 46:04), the Bank will monitor developments with a view to ensuring the safety and soundness of Barclays Bank’s operations in the country as it renders normal banking services,” read a statement from BoB.
Last week Barclays Plc announced its intention to sell its majority shareholding in BAGL over the next two-three years.
“We are today announcing our intention to sell down our 62.3% interest in our African business, BAGL, over the coming two to three years, to a level which will permit us to deconsolidate it from an accounting and regulatory perspective, subject to shareholder and regulatory approvals if and as required,” said Barclays Plc.
The announcement caused jitters in the local banking sector as stakeholders questioned how the divestment will impact on the local banks’ operations. However, Barclays Bank Botswana reassured clients and stakeholders that it remains committed to the local business, saying: “The Bank, with over 65 years in Botswana, remains committed to serving the country as it has done so in the past.”
Barclays Bank Botswana also explained that Barclays Plc’s divestment was not out of loss of confidence in the Africa market, but rather to mitigate against the effect of recently introduced regulatory burdens specific and particular to Barclays Plc as a UK headquartered and globally significant financial institution.
“These regulatory procedures significantly decreased BAGL’s standalone returns for Barclays Plc,” said the local Bank.
For its part, the Reserve Bank reassured local businesses that Barclays Bank of Botswana is a company incorporated in the country with its own capital.
“The Bank is complaint in terms of all statutory prudential requirements. Indeed, the Bank is well capitalised, liquid, profitable and has sound operations,” said BoB.