South African bank Absa is to step up its African expansion following shareholder approval for an R18.3-billion deal to combine with Barclays Africa, enabling it to start serving 14.4-million customers across 10 countries on the continent.
The deal will see Absa Group Limited combine with Barclays Africa and change the name of the Johannesburg Stock Exchange-listed company to Barclays Africa Group Limited in order to illustrate the "enlarged nature of the business", the firm said in a statement following the shareholders' vote on Monday.
"This is an exciting and transformational deal that will create a high quality franchise in Africa with a leading network of more than 1 300 outlets and 10 400 [automated teller machines] across 10 countries," said Absa Group chief executive Maria Ramos.
"The vote of confidence from Absa's independent shareholders is an important milestone in our journey towards becoming the 'go-to' bank across Africa."
The deal also got the green light from South Africa's biggest institutional investor, the Public Investment Corporation (PIC).
The PIC is owned by the South African government, with Finance Minister Pravin Gordhan as its shareholder representative; it was established in 1911 and has become one of the continent's largest investment managers, investing funds on behalf of public sector organisations and representing over R1.17-trillion in assets.
The PIC said the deal, worth R18.3-billion, afforded the bank the chance to diversify its income outside of the South African market. "We support the deal primarily because this provides Absa with an immediate exposure to a higher growth trajectory market," it said.