The board of Absa has accepted UK group Barclays’ bid for a greater than 50% stake in the South African bank, according to South African Reserve Bank Governor Tito Mboweni.
He made the disclosure while addressing Parliament’s Finance Committee on Friday, where he also attempted to dampen press speculation that the possible purchase by Barclays would result in a substantial inflow of foreign currency-denominated investment into the country.
“I wouldn’t be surprised if the deal was mostly in rand, because Barclays has a presence in South Africa and has substantial rand resources,” he told MPs. “They have also been very active buyers of rand, so therefore the inflow of foreign currency noted in press reports is likely to have been exaggerated – I think it might be disappointing.”
Mboweni added that South African regulatory authorities had not yet received a formal application from either Barclays or Absa on the transaction, noting that Absa shareholders’ approval was required before the bank could approach the Registrar of Banks for approval.
The governor was cautious on whether the South African government, in the form of the National Treasury and the Reserve Bank, would change their current “four-pillar” policy on bank ownership.
“The four-pillar policy means there is a preference for the big four South African banks to remain in South African hands,” Mboweni elaborated. “This is our policy position. But also there is nothing that remains stable all the time… and when the Treasury and the Reserve Bank get together at some point (it hasn’t happened yet) we will consider adjusting our position, and will let everyone know when we do.” – I-Net Bridge