Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Banking on Africa: Barclays PLC (ADR) (BCS) vs Standard Chartered PLC (STAN) vs Old Mutual plc (OML)

Page 1 of 2

Barclays PLC (ADR) (NYSE:BCS)LONDON — Question 1: What was the third region, along with the U.K. and U.S., which Barclays PLC (ADR) (NYSE:BCS)‘  CEO Antony Jenkins identified as the focus for investment in his recent strategic review?

Question 2: In what region is Standard Chartered PLC (LON:STAN) planning to double its revenues in the next five years?

There are no prizes for guessing that the answer is Africa, but the questions highlight how significant the region could become. Natural resources, a burgeoning and increasingly wealthy population, and massive Chinese investment are great attractions, but in a difficult and notoriously corrupt continent, it’s safer to invest through companies doing business there. Banking is especially well-placed to benefit from economic development.

Barclays
Last year, Barclays PLC (ADR) (NYSE:BCS) folded its directly owned African operations into its Johannesburg stock exchange-listed subsidiary Absa bank, now renamed Barclays Africa. As a result, Barclays’ interest rose to 62%. A unified ownership and operational structure will help expansion in the continent.

Barclays Africa has the largest number of bank branches on the continent, with 1,300 spread over 10 countries. Africa chipped in £0.5 billion to Barclays PLC (ADR) (NYSE:BCS)’ pre tax profit last year, contributing a quarter of the group’s total retail and business banking result.

Standard Chartered
Standard Chartered PLC (LON:STAN) is focused on wholesale banking and is well placed to exploit investment and trade links between Africa and Asia. With operating profit of $800 million, Africa contributed about 10% to StanChart’s bottom line last year. Income has risen at 15% p.a. over the past five years, and it’s that rate of growth that leads the bank to target a doubling of revenues within four to five years.

The bank will invest $100 million in new branches over the next three years, and expand its retail business to areas such as mortgages and Islamic banking.

Page 1 of 2
Loading Comments...