Barclays Plc is to sell its Africa business and become a 'transatlantic' bank focused on the United States and the UK. As Sonia Legg reports, it's a bid to simplify the group and boost shareholder returns after reporting a 2 percent fall in full-year profit.
It's been called a drastic move and Barclays share price reflected that. It fell more than 10 percent after a six percent fall on Monday. A decision by Barclays CEO Jes Staley to sell the bank's 62 percent stake in its Africa business is one worry. It's had a presence on the continent for more than a century. Jasper Lawler is from CMC markets. (SOUNDBITE) (English) CMC MARKETS, MARKETS ANALYST, JASPER LAWLER, SAYING: "It's a continuation of the same path that Antony Jenkins took them on which is simplifying the bank. The aim is not to not be in Africa, the aim is to go back to their traditional businesses in which they have traditionally done well, which is basically the US and the UK." But some fear Barclays is on a slippery slope. Its pretax profit for 2015 fell 2 percent - it's also cutting its dividend. That's despite sweeping cuts to trim costs Justin Urquhart Stewart is from Seven Investment Management (SOUNDBITE) (English) SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART-STEWART, SAYING: "In five years time, there may be no Barclays. It could disappear altogether, the brand may vanish. What it has to do is go back to its roots and its core. Has it got the strength and ability to do that given the domestic bank has changed so radically, in terms of competition, in terms of technology and in terms of the old structure of these banks, with old-fashioned computer systems, old-fashioned branch networks." Barclays is still paying for past misdeeds. It's set aside more than 7 billion pounds to compensate customers mis-sold loan insurance. There's a 4 billion pound provision for regulatory issues. And it's now co-operating with U.S authorities over its hiring practices in Asia. Staley's turnaround plan is still very much a work in progress