In office since the beginning of the month, Jes Staley, Barclays Bank new Director General initiated the review of the whole group’s activity. An exercise which is to end in March 2016 but which, according to Financial Times, could lead to a back-scaling of the group’s operations in Africa.

 The British media cited sources which are close to the case, and mentioned a number of hypothesis, one of which being that the bank would sell retail banking assets in some countries namely, South Africa, Kenya, Botswana, and Mauritius.

This hypothesis is backed by Jes Staley’s profile who has great experience in investment banking, and whose mandate is to decrease the group’s operations by focusing on defined market segments. From this, the disinvestment hypothesis in some African countries has emerged. Procedures for assets sales in Zimbabwe and Egypt to its African subsidiary also support the back-scaling hypothesis.

Africa currently faces challenges such as a fall in the prices of commodities, external instability, with among other consequences currencies’ value dropping. To this are added ordeals experienced by South Africa’s economy, Barclays Africa’s main market (Barclays Bank owns 63.4%), as well the shock resulting from President Zuma’s recent decision to appoint new Minister of Finance.

Some analysts do not share this point of view and say that it would make no sense if, as Financial Times suggested, Barclays scaled back its operations in Africa. Indeed, a quick overview of the group’s statistics at the end of September 2015 shows that Africa contributed to 13.3% of its return on equity, third behind Barclaycard, Barclays’ credit card division, but ahead of the investment banking division. Also, Afirca’s performances represent nearly 15% of the group’s pre-tax profits.

Staley’s decision will tell if Barclays’ new head bets on short term efficiency or if he can go for the wiser option: capitalize and invest once more on the medium and long term. The decision will be effective in the 15 African countries where the group has its subsidiaries. In Europe, countries such as Italy and Portugal already know what to expect. There, Barclays has already given out its retail banking branches.

Idriss Linge