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Absa Group Ltd. (ASA), the South African bank owned by Barclays Plc. (BARC), said its strategy of integrating operations with its British parent will survive the departure of Robert Diamond as chief executive officer.
“The Africa strategy has again been reiterated and supported by both the Barclays executive committee and the board,” Absa CEO Maria Ramos said today in a telephone interview from Johannesburg after talks with Barclays. “The ‘One Africa’ strategy remains very much top of the agenda.”
Diamond, who resigned on July 3 after regulators fined the U.K. bank 290 million pounds ($452 million) for attempting to manipulate the London interbank offered rate, sought to boost the lender’s profit by combining Absa and Barclays’s products and customer bases across more than 10 African countries.
“Absa has spent a lot of time and money integrating IT systems but there’s been no expansion in Africa and no great profit from either banks’ African operations,” Patrice Rassou, who helps oversee about $41 billion as head of equities at Sanlam Investment Management in Cape Town, said today in an emailed response to questions.
Absa gained 0.7 percent to 138.95 rand at the 5 p.m. close in Johannesburg, its highest in three weeks. Barclays climbed 0.7 percent in London to 160.15 pence, having dropped almost 38 percent from its 256.75 pence high in March. Absa has plunged more than 11 percent since it said on June 26 that profit in the six months through June fell as much as 10 percent, wiping out more than 13 billion rand of market value.
The share price has already been “punished heavily,” Rassou said of the stock, which has five buys, 10 holds and four sell recommendations against it, according to Bloomberg data. “We are long term investors and buy when everyone is fearful.”
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