Barclays buys into South African market

Barclays announced a full-scale return to South Africa today after confirming it would pay £2.9bn (€4.2bn) for a 60% stake in leading retail lender Absa.

The UK banking giant, which pulled out of South Africa 18 years ago amid protests from anti-apartheid groups, described the deal as the largest ever foreign direct investment in South Africa.

Johannesburg-based Absa, which employs 31,000 staff, had 6.1 million personal banking customers at the end of September, served by 668 full and subsidiary outlets and more than 4,500 ATM machines.

Chief executive John Varley said the deal helped “internationalise” Barclays earnings and involved a country with “great growth potential”. Barclays is expected to become Africa’s biggest bank as a result of the deal.

Mr Varley added: “Absa is an ideal partner for Barclays. It is South Africa’s leading retail bank, with a strong management team making very good returns for shareholders.”