The confirmation by Barclays Bank Plc that it will sell its stake in Barclays Africa has sent shivers down the spines of workers in the bank’s branches in Ghana.
The workers, most of whom want to be anonymous, said they were contemplating their future, as they were uncertain about who the new owners would be and their intentions for the future.
Hours after the bank announced what had been rumour for the past half year, the Daily Graphic spoke with some staff at the headquarters and other branches of the bank in Accra to gauge their mood. The Barclays Bank Plc of Britain has 62.3 per cent share in the African operation.
“As part of the simplification of the group, we have decided, subject to required shareholder and regulatory approval, to reduce our interest in Barclays Africa to a non-controlling, non-consolidated position over the next two years,” Daily Express , UK quoted the Chief Executive Officer of Barclays PLC, Mr Jes Staley as saying.
Panic withdrawals
The announcement is also expected to force major customers of the bank to rethink their business relations with the bank as they may be forced to withdraw their funds to save with other banks in the country.
Their action is likely to be influenced by rival banks whose appetite for new customers keeps rising as a result of the intense competition within the banking sector.
But in an interview with the Daily Graphic, banking consultant, Nana Otuo Acheampong, urged calm and advised against what he described as “panic withdrawals”.
He said the bank’s action would likely impact on the economy because of the role major banks such as Barclays play in the growth of every economy.
“the world over, the banking sector has been a major driver; take the United States and the United Kingdom, for example, and, you will recall that, when the banking crisis reached a crescendo, the governments in those countries had a step in to heavily bail them out” he said adding that “that tells you the importance of banks in the economy”.
Nana Otuo said the bank was also likely to lose rich expertise it presently boasts of, to rival banks.
“The bank per its mandate has been consistently training its staff to be top notch and all that might go waste – but this might depend on the new bank to take over the bank”, he said.
On the bank’s centenary celebrations next year, the banking consultant said “the news is likely to take shine off what could have been a major celebration to make the bank more popular”, he said.
Bank’s performance
The banking giant revealed annual losses after tax of £ 394million ($549 million, 505 million euros).
Consequently, Barclays has reduced its business to two divisions – Barclays UK and Barclays Corporate and International.
The lender, struggling to recover from several scandals, said it would split the banks into two units, focusing on its operations in Britain and the United States.
The 2015 net loss, compared to one of £174 million a year earlier, was largely the result of money set aside to compensate customers mis-sold a controversial British insurance product known as PPI.
After announcing in January its plans to exit Russia, Barclays last Tuesday said it would reduce its majority stake in the group’s African unit.
New boss
Barclays is facing major changes under the new Chief Executive, Jes Staley, a veteran American banker who began his latest role in December last year.
Staley has been tasked with restoring the banks battered reputation caused by a series of scandals including the rigging of foreign exchange and Libor interest rate markets.
Barclays fired its then-Chief Executive, Anthony Jenkins in July last year as he struggled to turn around the bank’s fortunes, but not before he triggered plans to axe thousands of jobs.
A new round of cuts was revealed in January, with Staley slashing 1,200 positions at its Investment Banking Division, alongside news that he was closing offices across Asia.
Barclays is one of several banks implementing job cuts amid a tough investment. Barclays is meanwhile said to be more than halfway through a three-year plan to cut 19,000 jobs, including 7,000 in the investment bank, and it still faces potential legal suits.
Last May, Barclays was hit with US$ 2.4-billion fine by US and British regulators for manipulation of foreign exchange trading. Other global banks have been fined over the affair.
Back in 2012, the bank was fined £290 million by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.
<<Print>>