Barclays Kenya at pains to explain it will not shut down

A general view shows the headquarters of Barclays Bank Kenya in the capital Nairobi, March 1, 2016. Barclays Kenya at pains to explain it will not shut down its operations in the east African country. Photo: REUTERS/Thomas Mukoya

NAIROBI -  Barclays Bank of Kenya was this week battling to explain to panic-hit Kenyans that it will not shut down its operations in the east African country.

Using all platforms, including press statements and social media, Barclays Bank was at pains to convince Kenyans that their money and jobs and shares were safe.

“It is factually incorrect that Barclays Bank of Kenya Ltd (BBK) is shutting down in Kenya. We have a clear strategy of our Kenya business and there are no plans at a local, regional and group level to shut it down,” BBK said in a statement.

“Your accounts are, and continue to be, safe and are not impacted in any way. The speculation concerns shareholding of Barclays Africa Group ltd does not impact the day to day running of BBK. Please do not be concerned, your deposits are safe and the operation of your account will not be impacted.”

The panic by shareholders and bank account holders was brought on by stories in the local and foreign media stating that Barclays PLC would exit Africa.

One of the major stockbrokers in Kenya, Genghis, had a headline reading: “Barclays PLC Exits African Business, Stock Loses 3 percent on Panic Sell-Offs…”

Genghis further said: “Tier 1 lender, Barclays Bank of Kenya (NSE: BBK), has been under scrutiny by investors over allegations of Barclays PLC exiting African operations. However, during the bank’s (Barclay’s PLC) FY15 results announcement, it indicated they will be selling down their 62.3 percent interest in their African business (Barclays Africa Group Ltd owns 68.5 percent of BBK’s shareholding).

“This will take place over the coming two to three years till they reach a level which will permit them to deconsolidate themselves in Africa from an accounting and regulatory perspective. This sell-off is expected to have some ripple effects on the Kenyan unit, as investors engage in panic selling.”

Answering questions posted on its Facebook page by account holders, BBK said: “Barclays PLC intends to reduce its shareholding in Barclays Africa. This means over the next 2–3 years it will reduce its overall shareholding from 62.3 percent to around 20 percent. Barclays Africa is not closing its operations and there will be no job losses.”

Speaking to ANA on condition of anonymity, a broker with one of Kenya’s main stock agents, Suntra, said: “Kenyans should not panic at all. In fact the exit of PLC is a good thing. It will enable the local bank to run independently. BBK will not go down and shareholders will not be affected.”

The broker said BBK should do more to re-assure their clients that their money was safe, considering that Kenyan depositors had lost millions of shillings in banks that have shut down.

Kenyan depositors are wary of the ongoings in Barclays PLC/Barclays Africa as the BBK saga comes hot on the heels of the collapse of Imperial Bank which caused the loss of billions of shillings (KSh) in depositors’ and bond investors’ money late last year.

The Central Bank of Kenya placed Imperial Bank under receivership in October 2015 after it emerged that the directors of the bank were privy to the fraudulent activities in the bank which included allowing a KSh 2Billion (US$ 20million) bond to run its course, despite knowing that the bank was collapsing.

And to show that BBK’s business was on track, the bank announced that it had launched its agency banking strategy by signing a partnership with the Postal Corporation of Kenya (PCK). This partnership would see BBK’s 800,000 customers access some of the bank’s services through PCK’s 400 outlets.

“Following this move, Barclays’ customers will now be able to make both card based and cashless deposits, card based withdrawals, balance enquiries, bill payments, and access mini statements from PCK outlets. Additionally, the PCK outlets will act as collection points for money sent through the Barclays Cash Send service,” said BBK in a statement.

According to trading information from the Nairobi Securities Exchange (NSE) towards the end of the week, BBK shares were trading at KSh 12.25 (US$ 0.12) indicating a 3.38 percent rise since the beginning of the week.

African News Agency

Discussion Policy would like to send you push notifications.
Notifications can be turned off any time in your browser settings.
You have been registered for browser notifications