Barclays PLC (LON:BARC) has cut its stake in its Africa division as part of its strategy to focus on its core businesses in the UK and the US.
The lender’s shareholding in Barclays Africa Group Limited (BAGL) will fall to 14.9% from 21.9%, which is expected to be completed on 5 December.
The company said reduction in its holding will boost its capital strength with the pro-forma common tier 1 (CET1) ratio rising by 12 basis points from 13.3% as of 30 September.
The news comes in the wake of the Bank of England’s stress test results on the UK’s banks for the year, which showed Barclays came out the weakest alongside Royal Bank of Scotland Group PLC (LON:RBS).
READ: Lloyds, RBS, Barclays and HSBC can handle Brexit risks, Bank of England's stress test reveal
Barclays and RBS failed the test on the amount of capital banks must hold at the start of the year but managed to strengthen their balance sheets in time to pass the stress tests.
The tests found all banks would be able to withstand another financial crisis and a “disorderly” no-deal Brexit.
However, the central bank warned that "the combination of a disorderly Brexit and a severe global recession and stressed misconduct costs could result in more severe conditions than in the stress test".
"In such circumstances, capital buffers would need to be drawn down substantially more than in the stress test and, as a result, banks would be more likely to restrict lending to the real economy."
Barclays closed down its non-core operations in June with the sale of its controlling stake in the Africa division to focus on its more profitable core businesses in the UK and the US.
In the third quarter, the lender revealed the decision to lower its stake in BAGL had reduced its risk weighted assets and improved its capital buffers enough to satisfy regulatory requirements and meet its 13% CET1 target.
READ: Barclays slumps as third quarter profit rises but investment bank struggles
The quarterly results already reflected 14.9% ownership in BAGL.