Barclays plc has pleasantly surprised the market by agreeing to pay a R12.8bn “divorce settlement” to subsidiary Barclays Africa, in which it is selling down its majority interest.

The payout is expected to significantly reduce the financial pressure on the African subsidiary caused by the separation.

Barclays Africa CEO Maria Ramos plans to spend some of the proceeds from the “divorce settlement” on rebranding the group and investing in its operations outside SA.

The two groups have agreed on a £765m (R12.8bn) separation fee to be paid by Barclays plc to allow Barclays Africa to cover the costs of investing in technology, rebranding, the termination of service level agreements between the two companies, and other separation expenses.

The largest share of the amount, R8.6bn, is set aside for technology, rebranding and related projects. “The agreement now is we have three years to change the brand,” Ramos said after the release of the group’s results for the year to December 2016. “We have to change the brand from Barclays.” (Business Day SA)

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