Following the recent announcement by Barclays PLC (LSE:BARC) to sell its 62.3% stake in Barclays Africa Group Limited (BAGL) (JSE:BGA) over the coming two to three years, the latter has started conversations with the Bank of Tanzania (BoT) to merge its two operation units in the country: Barclays Tanzania and National Bank of Commerce Tanzania (NBC).
The announcement was done by BAGL COO David Hodnett, whom in a recent interview with The EastAfrican explained that even though conversations are still in early faces of development, BAGL seeks to merge Barclays Bank Tanzania (BBT) and the National Bank of Commerce Tanzania (NBC) in which BAGL has 55% shareholding.
The merger depends on assessments and approvals from both the BoT and Tanzania’s Fair Competition Commission (FCC), therefore, it is still too early to give a deadline and more details about the merging process, Mr. Hodnett added.
However, an information disclosure done earlier in March, 2016, by BBT Managing Director Kihara Maina, indicated that the merging process between BTT and NBC could take up to three years to reduce Barclays Plc in BAGL and enable both banks to operate as a mutual community bank in the country.
BAGL currently employs 42,000 people in 1,251 branches deployed in 12 different countries where the bank serves its 12 million customers.
According to the group’s latest financial statement, BBT accounts for 0.58% of the total customers while NBC accounts for 4.38% of the total base.
BBT posted a loss of TZS 3.6 billion in the first three quarters of 2015 up from a loss of TZS 0.90 billion in the same period of 2014.
On the other hand, NBC recorded a profit income of over TZS 11 billion in the first three quarters of 2014 while in the Q1-2015 it recorded profits for TZS 2.8 billion according to the bank’s latest financial statements.
In terms of branches, BBT totals 25 employing 470 people while NBC totals 52 and employs 1,288 people, the second largest operation of Barclays Africa in East Africa after Kenya with 125 branches employing 2,592 people.
According to the latest available information at BOT there are currently 36 licensed banks operating in Tanzania 6 Financial Institutions and 2 Financial Leasing Companies for a population of about 50 million.