Pretoria – National Treasury and the Reserve Bank have thanked Barclays PLC for its commitment to implement its new strategy in a way that minimises the impact on the economies in which it operates.
This comes after the company announced its intention to reduce its 62.3% shareholding in Barclays Africa Group Limited (BAGL) over the coming two to three years.
The shareholding will be reduced to a level (less than 20%) which will permit the deconsolidation of BAGL for accounting and regulatory purposes. This is subject to relevant shareholder and regulatory approvals in each jurisdiction. Barclays PLC will remain a major shareholder in BAGL.
“Barclays PLC, in particular the CEO, has been in regular contact with both the National Treasury and Reserve Bank, and we would like to thank Barclays PLC for the constructive and open dialogue, and the commitment to implement the new strategy in such a way that minimises the impact on the economies in which BAGL operates,” said the Ministry of Finance and Reserve Bank in a joint statement on Wednesday.
Barclays PLC said the key driver of the decision was global regulatory pressures. The return on equity at group level is significantly reduced because of the additional capital and other regulatory requirements a large global bank such as Barclays needs to meet such as the globally systemically important bank (G-SIB) buffer, the minimum requirement for own funds and eligible liabilities (MREL) and total loss absorbing capital (TLAC) requirements and the UK Bank Levy.
The Reserve Bank will work with Barclays PLC and BAGL to ensure that any potential risks from the transaction are mitigated and appropriate measures will be taken to manage capital flows arising from the transaction.
Furthermore, South Africa’s Finance Minister and Reserve Bank Governor support the G20’s commitment made in Shanghai last week to address any material unintended consequences for emerging market and developing countries of the global financial regulatory reform agenda.
“South Africa supports the overall direction of financial reforms and will work with G20 countries to ensure that unintended consequences are reduced,” said the Finance Ministry and Reserve Bank.