Barclays will review Standard alliance
September 29, 2004
By Sherilee Bridge
Johannesburg - British banking giant Barclays, which is in talks to buy a majority stake in Absa, will have to pull out of its alliance with Absa's arch rival, Standard Bank, if the deal goes through.
Standard Bank and Absa were already neck and neck in the race for retail banking market share and judging by Standard Bank's aggressive growth in the retail end of the industry last year, it was suggested that its retail market share could overtake that of Absa within five years.
That, of course, was prior to last week's confirmation that Barclays was in talks with Absa.
"Barclays will obviously be reviewing all existing alliances and joint ventures if the offer is accepted," said Liz Hooper, a spokesperson for Barclays Africa.
Barclays International and Standard Bank's Barclaycard South Africa launched its first product, a Manchester United-branded Barclaycard, in South Africa just over a year ago.
The card was the first of seven products the two banks planned to offer and has since been joined by a gold card and Standard Bank's Bluebean cards.
Bluebean, one of the first cyber currency initiatives introduced in South Africa, is an internet banking and loyalty programme linked to the use of the credit card by some 95 000 Bluebean customers.
Barclaycard SA has become a major new player in the local credit card market, attracting an average of 11 000 new account holders and issuing about 15 000 new cards every month.
While the jointly funded venture was seen as a sign that Barclays had shelved plans to re-enter the retail banking space directly, last week's news says otherwise.
Barclays said its alliances would be looked at as part of due diligence. "Twelve months ago this was not a situation we envisaged," said Barry Fergus, the managing director of Barclaycard International. He said a board meeting on the joint venture was held last week and "the two banks decided to carry on as usual until the situation became clearer".
"Absolutely delighted at how things have been going," Fergus indicated that the alliance could be restructured but the cards would not fall away.
"Barclaycards would definitely continue regardless of the outcome," he said.
Standard Bank retail banking managing director Peter Wharton-Hood said: "Understanding that the Barclays-Absa deal still has some way to go, it's obviously too early to say what would happen to the joint venture. But for now it continues."
Having exceeded 150 000 accounts by the end of 2003, Barclaycard SA was targeting 1 million new card customers in South Africa in the next decade.
The UK's first credit card, Barclaycard was set up in 1966 and has now become Europe's leading issuer of credit cards, with 11 million cards in circulation in 22 countries worldwide.
Standard Bank's card division grew its market share to 29 percent of the local market in 2003. with 272 000 card accounts opened during the year.
UK bank could seek 60% of Absa - reports
Johannesburg - British bank Barclays could seek as much as 60 percent of Absa, according to the London rumour mill.
UK media reported that Barclays, which is the UK's third-largest bank by assets, could seek 60 percent rather than the 50.1 percent stake that has been bandied about in the South African media.
While the reports cited Barclays sources, Barclays Africa spokesperson Liz Hooper put the talk down to "pure speculation".
"We have yet to announce the size of the stake we may be interested in acquiring," Hooper stressed.
Barclays said in a statement on the London Stock Exchange last week that it was in discussions with Absa for a majority stake in the bank. Barclays did not supply details.
Hooper said Barclays was considering a partial offer to ensure that Absa remained a locally listed company. Barclays has indicated that it would not seek a South African listing.
|
|
