Out of Africa: Barclays Calls it Quits After a Century by Reuters @FortuneMagazine March 1, 2016, 6:39 AM EDT E-mail Tweet Facebook Linkedin Share icons British bank Barclays Plc bcs will sell its Africa business as part of a plan by new Chief Executive Jes Staley to simplify the bank’s structure and seek higher shareholder returns, after reporting a 2 percent profit drop and slashing its dividend. Barclays said Tuesday it planned to sell its 62 percent stake in Barclays Africa Group over the next two to three years, ending its presence on the continent after more than a century and becoming a “transatlantic” bank focused on the U.S. and Britain. Barclays Africa, which has assets of around $66 billion in 13 countries across the continent, rushed to assure customers that the bank, whose branches are the only financial services outlet for miles in many of its markets, won’t be closing down and would continue to operate at normal. Its U.K. parent, meanwhile, will now concentrate on two divisions, Barclays U.K. and Barclays Corporate and International, to comply with ‘ring-fencing’ regulations aimed at safeguarding its retail banking business from riskier operations. Barclays is “fundamentally on the right path,” Staley said in his first results announcement since taking over one of the most prominent roles in British business in December. Adjusted pretax profit fell to 5.4 billion pounds ($7.5 billion) for the year to Dec. 31 from 5.5 billion a year earlier, missing a consensus forecast by nearly 10%. The bank said it was cutting its dividend to 3 pence per share from 2016 from 6.5p in 2015, a move Staley said would help Barclays maintain capital levels while it disposes of unwanted assets. Its stock fell 10% in response to the news, making it the worst performing stock in London’s benchmark index. Staley told reporters he was comfortable with the bank’s capital position, dismissing some concerns that Barclays might need a cash call to bring its common equity Tier 1 (CET1) ratio, a key measure of financial strength, closer in line with rivals. The bank’s CET1 stood at 11.4 percent, from 10.3 percent a year earlier, while its leverage ratio improved to 4.5 percent. “While we believe that the cut in dividend will be taken negatively initially, it will help to allay fears of capital weakness,” analysts at Haitong Research wrote. In the few months since Staley’s appointment, Barclays has made sweeping cuts across its investment bank and exited several businesses including in Asia, aiming to trim costs, reduce risk and shore up its balance sheet. However, legacy issues continue to hurt the bank, with 4.01 billion pounds of provisions made against an array of regulatory missteps, compared with 2.36 billion a year earlier. Barclays also joined the list of those to admit cooperating with the U.S. Department of Justice and the SEC on an investigation into hiring practices in Asia. The banks are suspected of hiring the children and relatives of well-connected political figures to buy political favor there.