Barclays announced last week that it intends to sell its African operations. The emergence of Bob Diamond, the bank’s former chief executive, as a possible buyer raises the question of which bits of its business it should be cutting. Mr Diamond, who took control of Barclays Capital in 1996, started Atlas Mara, an African banking venture, after he resigned as Barclays chief executive in 2012. As Barclays joins its international peers in scaling back global ambitions, specialist businesses like Atlas Mara are growing. A new banking landscape of fewer and smaller universal banks supplemented by product and regional banks is beginning to emerge. Barclays’ tale is a poignant one, for it came late to universal banking. After 25 years of trying, it achieved its ambition of becoming a top five global bank in 2008, at precisely the moment that the banking crisis forced others to retrench. The deregulation of the UK financial services industry, which started in 1983, offered Barclays an opportunity to add investment banking to its impressive retail banking franchise. It already had a banking presence in Africa and parts of the former British empire through Dominion, Colonial and Overseas, created in 1925 when the Treasury prevented it from expanding domestically. The combination of retail, investment and overseas banking would, Barclays’ management hoped, enable it to compete with Citicorp, at the time the role model for all globally ambitious banks. Under Walter Wriston, chief executive from 1968-1984, the US bank had targeted annual growth of 15 per cent, to be achieved through innovation, acquisition and overseas expansion. But Barclays found that emulating Citicorp’s reach was harder than it looked. Investment banking was unpopular with shareholders and a drain on capital. So in 1997 it cut its losses, retrenched in capital markets to a debt-based model and put its universal banking ambitions to one side. Not much was heard of these until John Varley became chief executive in 2004. By this time, Mr Diamond had restored credibility to Barclays’ investment banking operations by making Barclays Capital a powerful force in debt capital markets. With this strong second leg to its business, Barclays regained confidence and went on the offensive. It made a series of retail banking acquisitions in Europe and Africa, including the purchase of a majority stake in the South African bank Absa in 2005. Emboldened, Mr Varley and his board spent a lot of time discussing their vision for universal banking and concluded that it would not be enough merely to become one of the pack. Barclays would try to become a leading global bank, where the rewards from a balanced geographic and product portfolio were greatest. It made an unsuccessful bid for the Dutch bank ABN Amro in 2007 in pursuit of this aim. The credit crunch which began that year prompted the board to reconsider its plans, but it decided to press on. Barclays survived the banking crisis without requiring a direct bailout from the UK government, and took advantage of the chaos on Wall Street to pick up Lehman Brothers’ equities and corporate finance business for a song in 2008. It now had a full-blown investment bank to go alongside its globally spread retail and commercial banking business. At last Barclays was a top-drawer universal bank. Its moment in the sun proved to be fleeting, however. In 2008, Citigroup, the successor to Citicorp, collapsed and the US government had to bail it out. Aggressive management action followed and by 2010 a refocused, more geographically compact client-led business had emerged. Citigroup was on the way back but universal banking was not. Throughout the world, the pressure to conserve capital to meet new regulatory requirements caused universal banks to abandon certain territories, asset classes and markets. Barclays’ decision to sell up in Africa is part of that process. Mr Diamond’s successor, Antony Jenkins, was subsequently ousted, apparently because he was considered too aggressive in dealing with the investment bank. In fact, the cutting there was not aggressive enough. The business that Mr Diamond built was right for the booming markets of the 2000s but too capital-intensive for the era of banking austerity. Barclays is now selling a high-return business in Africa, when tougher and earlier action at the low-return investment bank would have been a better option. That would have kept Barclays at global banking’s top table at a time when there are plenty of seats available. It would also have spared it the potential embarrassment of negotiating with Mr Diamond.