Barclays Kenya CEO Awori fights to retain brand name after parent’s exit

Barclays Bank of Kenya CEO Jeremy Awori during a media engagement on April 13, 2016 at the Capital Club in Nairobi. Mr Awori said the bank would negotiate to retain the brand name after the parent company's exit in the next 2-3 years. PHOTO | DIANA NGILA | NATION MEDIA GROUP

What you need to know:

  • The mother firm owns 62.3 per cent of Barclays Africa Group

  • Barclays Africa Group holds a controlling stake of 68.5 per cent of Barclays Bank of Kenya and shares in 11 other operations in Africa.

  • On March 1, Barclays Plc confirmed its planned exit from the African market, resting months of speculation.

  • Analysts say that the value of the Barclays brand is so huge in Africa, having cut identities across several generations.

Barclays Africa Group could still retain its brand name even after its parent company divests from the continent, Barclays Bank of Kenya CEO Jeremy Awori said Wednesday.

Mr Awori said this as he revealed that in the two to three year period leading up to the divestment by Barclays Plc, Barclays Africa would retain its brand name.

“With the planned deconsolidation it (Barclays Plc) did not say it would conclusively rid of the brand. It depends on who they sell to, and that is not known now,” said Mr Awori as he gave an update on the planned move by Barclays Plc.

The mother firm owns 62.3 per cent of Barclays Africa Group, which in turn holds a controlling stake of 68.5 per cent of Barclays Bank of Kenya and shares in 11 other operations in Africa.

Mr Awori cited several scenarios on the planned divestiture. “We can have a scenario where they (Barclays Plc) decide to partner with the purchaser and license the use of the brand. That’s one scenario,” said Mr Awori highlighting the desire by the lender to retain its brand.

Mr Awori, however, ruled out a change of the Barclays brand name in the period leading up to the sale saying it was protected by legal agreements.

“There was a licensing agreement between Barclays Africa and Barclays Plc that they cannot dispense of the brand during the period before the sale,” said Mr Awori.

Experts told the Nation that the desire by Barclays Africa to retain the name was not unexpected, based on its immense value among consumers.

“The Barclays Africa brand carries a lot of cachet on the continent. Therefore, I appreciate why Jeremy Awori would be keen on its retention. The (Barclays) share price has been in a tail-spin and is down -24.26 per cent year to date, which speaks to investors worrying about franchise erosion,” said  Rich Management chief executive Aly Khan Satchu in an email.

CUSTOMERS' ANXIETY

On March 1, Barclays Plc confirmed its planned exit from the African market, resting months of speculation.

The announcement sent shock waves across the continent, with Kenyan customers of the lender expressing anxiety over the future of the local unit.

Barclays Plc chief executive Jes Staley said then the lender would sell its 62.3 per cent interest in the African business, Barclays Africa Group Ltd (Bag), over the coming two to three years.

“As part of the simplification of the group, we have decided, subject to required shareholder and regulatory approval, to reduce our interest in Barclays Africa to a non-controlling, non-consolidated position over the next 2-3 years,” said Mr Staley.

Analysts say that the value of the Barclays brand is so huge in Africa, having cut identities across several generations.

Barclays Africa Group Ltd, which includes the South African branch network Absa, is one of the largest banks on the continent.

The firm has 45,000 employees and 1,267 branches across 12 countries, including Kenya, Ghana, Tanzania, Mozambique, and Uganda.

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