Barclays leaves Africa, a very competitive banking market

Barclays, a British banking giant, left the African market after selling its remaining 7.4% stake in Absa, a South African bank. He made a trip to Africa about a century ago. While many interpret that Barclays wants to refocus on the UK, Europe and the US, my thesis is simple: the African banking market is super competitive for it. So, over the years, it has reduced its footprint, including selling investments.

In the US, I don’t have a banking app. Why do I need to install a banking app? To do what? The web application works flawlessly and new innovations can only add marginal value. In other words, the system cannot be radically changed easily. But in Nigeria, change happens quickly and can knock a bank off the charts.

Diamond Bank was the pioneer of mobile banking services, this is no longer the case. GTBank invented the web application bank, but it seems trivial when you look at the current numbers. My point is this: the rate of adoption of new technologies in Nigeria is such that anything can happen.

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In this world, a bank with a British gene that, like the United States, does not need this level of processing will struggle. Refocusing means that you are not doing well in your current place. Don’t take the changes happening in the African banking sector for granted. You can’t afford to sleep.

In the US I am not aware of any USSD banks. And even if someone does, it won’t mean much since in the grand scheme of things it wouldn’t add much value. But in Nigeria, if you don’t have it, you would score an own goal.

Yet, for all African banking competitions, it is only transactional. The true spirit of banking – lending – in addition to retaining deposits, must be elevated for the bank to retain its space as a catalyst for economic wealth.

Comment on the stream

Comment 1: I agree. The banking sector in Africa is highly competitive for the survival of traditional banks like Barclays. Remember years ago Barclays was an elite club, where you had to have someone with an account there to refer you before you could open an account; this was the case at least in Kenya. Then came Equity Bank, and all the other banks that liberalized the financial landscape in Kenya and Africa, giving access to everyone, including this initially forgotten street vendor. The African banking landscape is indeed very competitive for some of these Western institutions to survive without a change in mentality.

Comment 2: The transaction value of African value, as you noted, is not enough to motivate Barclays to stay in Africa.
We just hope that our banks will increase their business to the level of what real banks are supposed to do in the US, EU and UK.

Comment 3: Barclays has terminated its partnership with Absa. Barclays is still in the African market, this time they are going it alone.

My answer: Maybe but even from your link it does not appear. You can still see the Barclays logo but I’m not sure. Tick ​​“Barclays branded subsidiaries of Absa Group Limited operate in seven countries in Sub-Saharan Africa, including Botswana, Ghana, Kenya, Mauritius, Seychelles, Tanzania and Zambia”. Logic dictates that if he left ABSA, that means he cannot claim ownership of those subsidiaries since they are owned through ABSA even though he is paid a royalty for the use of his trademark etc. If A owns 7% in B and B controls d, e, f, g. If A sells his share in B, he cannot claim to own those d, e, f, g even if they operate under his brand. Of course, I could be wrong, but nothing in your link shows that it is still expanding in Africa!

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