Absa Separation from Barclays 69% Complete; on
Track for Completion in 2020
Absa Group Ltd., one of the largest financial services providers in Africa, told investors yesterday that its programme to separate from Barclays PLC is 69% complete. Absa said 184 of the 266 projects have been successfully delivered, two years into the three-year programme.
The separation comprises the gradual replacement of services, primarily involving operational and information technology, provided to Absa by Barclays PLC, which reduced its shareholding in the African financial services group to a minority stake in 2017. The separation also includes transitioning from the Barclays brand to ‘Absa’ in 12 countries, a process that is underway with South Africa having been completed during 2018.
“Very few programmes of this level of complexity are being undertaken in the financial services industry today,” said Paul O’Flaherty, Chief Executive: Engineering Services, at Absa Group. “We have passed several milestones, but there are hard yards still to come,” he said. The successful migration of core banking platforms in African regional operations in April and digital channels in African regional operations in May are significant recent milestones, he said.
The 266 projects in the separation programme have an average 18-month duration and several run concurrently. More than 1,000 Absa employees and about 800 contractors are working to deliver the separation.
The separation presents a strategic and operational opportunity to effect improvements with half of the systems being replaced being transformational in nature and the other half being a hybrid of refreshed systems with transformational elements.
Barclays PLC made a R12.6 billion contribution towards the separation programme in 2017. Of this figure, R8.5 billion has been spent to date.
While capital expenditure will peak in the current calendar year, the separation programme is running on time and within budget.