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Barclays' Exit Biggest Pullout Yet in S. Africa

November 25, 1986|MICHAEL PARKS | Times Staff Writer

JOHANNESBURG, South Africa — Britain's Barclays Bank announced Monday that it is pulling out of South Africa after 61 years here, raising concerns that other European companies will join the American exodus from this politically and economically troubled country.

Chris Ball, Barclays' local managing director, said that the London parent is selling its 40% share of Barclays National Bank here to the Anglo American Corp., the giant South African mining and industrial conglomerate, and two associated companies for $265 million, less than the stock's market value.

Apartheid a Factor

Although declining profits and other business considerations were involved in Barclays' decision to pull out--the largest withdrawal yet in dollar terms--Ball told newsmen that "political factors," including anti-apartheid protests in Britain and the new American economic sanctions on South Africa, "have precipitated this transaction."

At a news conference in London on Monday, Barclays Chairman Timothy Bevan acknowledged that the anti-apartheid campaign has played a role in the bank's pullout.

"There has been a noticeable but not significant loss of business," he said. "The profit loss has not been substantial, but it has been high-profile."

Bevan, who visited South Africa recently to complete the deal, also said the parent bank found this nation's future too uncertain and the process of political, economic and social reform too slow to justify its continued presence here.

"Our decision was a commercial one," he said, "but it was based on the political and moral situation. All three are part of a circle."

Basil Hersov, a leading South African industrialist and the chairman of Barclays National Bank here, described the move as "a major disinvestment," surpassing those announced recently by such American giants as General Motors, IBM, Coca-Cola and Eastman Kodak, and he warned that the withdrawal would have a serious and inevitable psychological impact on the country.

'Irresistible' Pressures

"Political pressures on Barclays to withdraw from South Africa finally became irresistible in the view of the London board," Hersov added. "Barclays London felt the stage had been reached when the cost of being in South Africa in terms of the obstructions and difficulties this generated for Barclays operations in other parts of the world was no longer tenable."

The move was immediately hailed by anti-apartheid campaigners in London as "a tremendous breakthrough" in their efforts to isolate South Africa politically and economically until the white-led minority government here yields power to the country's black majority.

"We regard this as an historic victory in the whole campaign for sanctions against South Africa," said Mike Terry, executive secretary of Britain's Anti-Apartheid Movement. "We have had successes with sports boycotts, arms embargoes and cultural links. But this is our first major victory in the corporate field."

Claims 12,000 Accounts Lost

Vicky Phillips, president of the National Union of Students, claimed that the two-year campaign against Barclays in Britain had cost the bank an estimated 12,000 accounts, mostly among young potential depositors.

"I think (the pullout) is a major victory in the . . . campaign against Barclays Bank and also a major morale booster to all the people in South Africa and Namibia who are fighting against the apartheid regime," she said.

The South African government refused to comment on the Barclays move despite the implied criticism of its policies as well as the clear lack of confidence in its ability to resolve the country's deepening crisis.

Barclays' withdrawal will prove to be "an economic earthquake," financial analysts here said, warning that it will inevitably shake business confidence in South Africa's future. For years, Barclays National was the country's largest bank but slipped to second place a year ago behind Standard Bank, also British-owned.

Other Pullouts Predicted

Many other foreign companies, lacking Barclays' substantial market share, will now pull out, they predicted, and other repercussions, including much reduced access to international money markets and increased concentration of domestic capital in South Africa, will be felt for many years.

Barclays is the first major European investor to withdraw from South Africa in recent months despite mounting protests in Britain, France, the Netherlands and several other West European countries over their economic ties with South Africa. Since January, 1985, more than 70 American companies have left or announced their intention to leave--a trend that is accelerating.

"If Barclays with all its money and years here thinks that it is not worth staying," a West European diplomat commented, "then the company with a profitable but small South African subsidiary will have to ask itself what gives it the confidence to remain. Many will conclude, quite naturally, that the prudent thing to do would be to leave quietly."

Negative Impact

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