British bank Barclays sells $687-million stake in Arrie Rautenbach-led Absa Group

Barclays Bank Plc, a British multinational bank led by U.S. banker C. S. Venkatakrishnan, has sold a 7.4-percent stake in Absa Group, a South African financial services conglomerate led by prominent banking executive Arrie Rautenbach.

According to Bloomberg, the deal resulted in the leading British bank pocketing £526 million ($687 million) in cash from the sale of its 7.4-percent stake, resulting in a reduction in its shareholding, as the transaction reduced its stake by half, from 15 percent to 7.3 percent.

The London-based financial services behemoth sold 63 million shares at R164 ($10.88) per share, a 7.3-percent discount from the stock’s Wednesday closing price of R177 ($11.5) per share.

Absa Group shares have fallen by more than four percent since the opening of the Johannesburg Stock Exchange this morning, as investors reduced their holdings in the lender in response to Barclays Bank’s recent sell-off.

In recent years, Barclays has been reducing its stake in the South African lender. In 2017, the British lender sold a significant portion of its controlling stake in the group.

The London-based group disclosed that the net proceeds from the company’s recent transaction will be used for general corporate purposes.

Rautenbach, a South African banking executive who was appointed CEO and executive director of Absa Group and Absa Bank nearly three weeks ago, is charged with leading the financial services group’s post-pandemic expansion phase.

This is consistent with the group’s strategic expansion as management seeks to build on its strong financial performance in 2021 despite operating environment headwinds.

According to the group’s financial report, its headline earnings at the end of 2021 rose by 195.2 percent from R6.04 billion ($399.3 million) in 2020 to R17.83 billion ($1.18 billion), which is significantly higher than the R16.3 billion ($1.08 billion) in 2019 before COVID-19.

The triple-digit percent increase in earnings was fueled primarily by the economy’s recovery, as well as management initiatives implemented during the year.