Barclays has moved closer to taking a majority stake in one of South Africa's biggest banks.

Discussions with Absa Group are progressing and Barclays has completed due diligence on the country's largest retail lender.

The UK group announced in September that it was in talks about taking a major stake in the business, which yesterday reported a 16 per cent rise in underlying earnings to 2.5 billion rand (£224m) for the six months to the end of September.

While Barclays has corporate banking offices in South Africa, a deal with Absa gives the bank its biggest presence since its withdrawal in 1986.

Barclays has not said how much of a stake it intended to take in the company, which employs 31,600 staff and has a market value of about £4bn.

Absa had 6.1 million personal banking customers at the end of September, served by 668 full and subsidiary outlets and more than 4,500 automated teller machines.