HARARE-Barclays bank which is nearing completion of its restructuring exercise following the acquisition of a controlling stake by pan African bank FMB Capital, has resolved to spin-off its non-core properties.

The move appears as prudential cushioning of shocks that may arise from the ongoing transition, which will see the bank undergoing phased rebranding amid other structural shifts within the operation.

In a cautionary statement published on the ZSE website the bank said its directors have approved subject to the regulatory approvals, the unbundling of the company’s non core banking properties into a separate vehicle to be listed on the ZSE.

A core asset within the property portfolio is Makasa Sun which is a 50% hotel property  in Victoria Falls. The property operated by African Sun, is jointly owned together with Dawn Property, a listed property company which is related to African Sun.

Makasa has over the years exchanged hands emerging from Delta spinoff in 2001 to be 100% owned by Barclays, 50% disposal to Dawn in 2016 and now the spinoff from Barclays.

Makasa is however not the only property owned by Barclays. The bank had a property portfolio valued at $20 million a quarter being investment properties as at June 2018.

It is likely that a great deal of the bank’s properties will be turned into investment to create a meaningful portfolio worth dangling at potential  investors on going public.

The bank earned only $192,000 in rental income from the property investment portfolio which deduces into a yield of less than 1%. The figures were however not as elaborate to show individual property performance.

If no additions are made to the Barclays property portfolio before separate listing, and assuming it carryover its entire property portfolio with it, the resultant property company will be smallest in size on compared to the other 4 listed property companies.

From a core banking perspective it is however rationale to see the move as addressing concerns of focused banking through operations streamlining.

 Core activities typically in lending have in recent periods generated a windfall for banks whose earnings are presently shooting into the sky. Freeing up more resources and instead focussing them on core activities is likely to result in a higher return on equity and assets due to a relatively favourable return.