UK-based banking group Barclays has sold a 7.4% stake in Africa’s Absa Group in a deal valued at around $687m.

Barclays, through its wholly-owned subsidiary Barclays Principal Investments, sold over 63 million shares in Absa at $10.88 apiece.

The British bank said it will use the proceeds from the sale for general corporate purposes of the group. 

The divesture is expected to add approximately 10 basis points to Barclays group’s CET1 ratio as of 31 December 2021 and a loss on sale of £43m through the income statement.

Following the deal, Barclays will own 63 million ordinary shares or a nearly 7.4% stake in Absa, which was earlier known as Barclays Africa Group.

Barclays, which has been present in Africa for around 100 years, has been reducing its stake in Absa in recent years.

In 2017, the UK-based bank sold a majority stake in Barclays Africa Group, which was rebranded as Absa Group the following year.

The stake sale in 2017 is believed to have been triggered by the tighter regulatory norms following the financial crisis in 2008.

The latest announcement, which brings Barclays a step closer to African exit, comes in the wake of global turmoil caused by the Russia-Ukraine war.

Barclays’ remaining stake in the African unit will be subject to 60 days of lock-up restriction after the placement, which is expected to complete next week.

Last week, Barclays’ peer Standard Chartered announced plans to retreat from several markets across Africa and the Middle East (AME) region.