Barclays to pay $988 million in split with African business

Barclays has agreed to pay its African subsidiary $988 million to fund investments needed for it to split from its African business.

The move is expected to pave the way for the British bank to cut its stake to below 50 percent.

Barclays is in the middle of an overhaul that includes cutting its holding in the African business as part of broader plan announced a year ago to focus on the United States and Britain.

In a statement issued shortly after releasing its annual results on Thursday, Barclays Africa said the money would be used to invest in technology, rebranding and other separation related projects.

The agreement requires approval from the South African central bank and the finance minister, Pravin Gordhan.

The split will allow Barclays Africa, Africa’s third largest bank by market value, to manage its own business on the continent.

The London-based bank said in March last year it wanted to cut its 62 percent holdings as part of it’s plan to retreat from the continent and raise cash to reduce its capital burden.

The bank said Barclays Africa will be allowed to use the Barclays brand in the rest of Africa until 2020.