Barclays PLC reduced its holding in former unit Absa Group Ltd. by half after selling 63,072,651 ordinary shares in the South African lender through an accelerated bookbuild placing at 164.0 rand per share, amounting to total gross proceeds of 10.34 billion rand, or roughly £526 million.
Following the sale, the U.K.-based bank's remaining stake in Absa stands at about 7.4%.
Barclays expects the placing to increase the group's common equity Tier 1 ratio — a key measure of a bank's financial strength — by about 10 basis points as of the end of 2021. It is also anticipated to result in a loss on sale of £43 million through the income statement.
Barclays' attributable net profit was £1.34 billion in the fourth quarter of 2021, while its CET1 ratio stood at 14.74% at 2021-end, according to S&P Global Market Intelligence data.
In 2016, Barclays announced its intention to reduce its stake in Absa, then named Barclays Africa Group, to under 20% so it can deconsolidate the business from a regulatory perspective. The following year, the British bank reached an agreement on separation terms with the company and sold a huge chunk of its 50.1% controlling stake.
Absa Group recorded a pretax profit of 27.85 billion rand from its South Africa and Africa regions geographical segments in 2021 and a 1.12 billion rand impact of the separation from Barclays, Market Intelligence data showed.
Absa said the separation was successfully completed in 2020 but it has continued to reflect significant post-separation impacts on the group's financial results.
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