Barclays Africa CEO says sorry for Rand fixing

Feb 23, 2017

Barclays Africa Group apologised for its role in a rand-fixing affair involving more than a dozen banks, saying that it tipped off regulators about the practice after suspending two of its own traders.

“We deeply regret that this conduct took place within our organization,” CEO Maria Ramos said on a conference call Thursday, without identifying the employees. “Those who contravened our rules will be held accountable.”

South Africa’s antitrust investigators listed more than a dozen banks, including Barclays Africa, in its probe earlier this month and named more than 30 traders for price fixing and market allocation in the trading of foreign-currency pairs involving the rand. Citigroup on February 20 said that it agreed to pay a penalty of almost R70 million ($5.4 million) to settle the case and would make witnesses available to help prosecute other banks.

Barclays Africa’s Absa unit said in a statement Thursday that the Competition Commission isn’t seeking any administrative penalty against the bank. The lender said it brought the conduct of the currency traders to the attention of the commission under the regulator’s leniency program.

Under pressure

The antitrust finding comes as President Jacob Zuma and his governing African National Congress step up pressure on the country’s four largest lenders, saying they should lend more to black clients. Zuma and the banks are also locked in a stand-off after the lenders closed the accounts of companies tied to his friends, the Gupta family, who are accused of using their relationship with him to influence government appointments and contracts.

Barclays Africa was also the target of protests outside some branches after a leaked draft report by South Africa’s anti-graft ombudsman said the lender may have benefited from a bailout provided to a bank it bought before the end of apartheid.

Barclays Africa rose 0.6 percent to R158.51 as of 10:30 a.m. in Johannesburg. It’s the worst-performing bank stock in South Africa this year, having declined 5.8 percent compared with the average drop of 4.8 percent on the six-member banks index.

Earlier, Barclays Africa said it will receive the equivalent of about $1.1 billion for costs associated with splitting from its UK parent Barclays.

The African bank’s full-year net income rose 2.6 percent to R14.7 billion from 14.3 billion a year earlier after the bank contained costs and increased lending to businesses. Earnings per share excluding one-time items rose 5 percent to 17.69, missing the 17.94 rand median estimate of 11 analysts surveyed by Bloomberg. Return on equity declined to 16.6 percent from 17 percent and the cost-to-income ratio dropped to 55.2 percent from 56 percent.

 

- Bloomberg

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