Banks' Africa move not to hit jobs

Word on Bank Street is the action is moving to Africa.

Barclays’ announcement of it moving a key unit to Africa set the speculators going – banking jobs were at risk; Lloyds, HSBC and Standard Chartered were to follow Barclays.

However, contrary to speculation, the banks themselves and recruitment experts believe that expansion in Africa does not mean that banks here are shutting down operations, leading to staff transfers or job losses.

A statement given to this website by Barclays states: “The move of the Barclays Africa regional office has no impact whatsoever on the other Barclays businesses in the UAE or the wider Mena region.

“Barclays Africa, which is the Barclays business unit responsible for 10 African operations of the Barclays Global Retail Banking division, will be migrating to Johannesburg, South Africa to better align its African businesses with Absa Banking Group in SA.

“This will allow Barclays to implement its One Bank in Africa strategy to the benefit of its customers and clients across the African continent.

“The Barclays Africa Regional Office has been based in Dubai since 2007, but was previously located in South Africa. The Barclays Africa business unit does not conduct any business in the UAE and the Gulf.”

According to Shane Phillips, Mena Regional Practice Leader, Financial and Professional Services at Stanton Chase, “this is more of a strategic re-alignment.”

“Barclays see Africa as a core market and has moved its African headquarters to Johannesburg. With 70 per cent of the African market still unbanked this represents one of the biggest growth agendas for any bank in the region.  

“Barclays is keen on positioning themselves in this geography and thus we have seen the move.  

“Lloyds was never a big player in the region and are really here to service UK nationals and UK companies operating here. They have one branch in the UAE and to my knowledge do not have any plans to grow that presence.  

“Barclays has chosen to run its African operation from South Africa but other players such as Standard Chartered Bank are committed to running their African team from Dubai.

“The problem is there are so many things happening in the Middle East, we have to be careful not to assume they are all related,” explained Phillips.

According to an HSBC spokesperson, “The bank announced it is reviewing its retail banking and wealth management operation across six countries in the Mena region including UAE.

“The review is to ensure its management structure is efficient and that the bank is responding to changing customer behaviour and habits.

“However, the UAE has a very strong retail banking and wealth management business, and in addition it will become the hub country for the regional retail business. Because of these factors we anticipate minimal- if any - job losses."

Analysts in the recruitment industry do not believe that international banks are not doing well in the UAE.

“International banks can only have seven full branches in the UAE and all agree that’s too little. They might be closing some of the rep/mall operations,” Peter Greaves, Director, Head of Financial Markets at McArthur Murray, Dubai told Emirates24|7.

“I know that HSBC, Barclays etc are downsizing /streamlining a bit, whereas banks likes ADCB and even smaller ones like Ajman Bank (both regional) are opening branches,” added Hasnain Qazi, Middle East Business Manager at Huxley Associates.

The attention Africa has been receiving is simply because of the huge growth potential as the region in under-banked. In comparison, the UAE is said to be an over-banked place.

“I think you will see most banks paying more attention to Sub-Sahara Africa as we move forward. What you will witness is what they are calling ‘The Emergence of the Underclass’ as this huge unbanked population comes online.

“You will witness the same movement in India as there are 600 million people who do not have a bank account in [the country]. This is a huge growth opportunity.

“So banks will be aligning themselves to take advantage of these growth opportunities, which in fact will result in job growth not job cuts,” said the Stanton Chase expert.

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