The bank, Britain's third largest by assets, said Thursday it was talking with Absa, a major South African bank, about buying a controlling share, the Independent reported Friday.
Barclays returned to South Africa in 1995 with its corporate and investment banking business, but it still lacks a retail presence.
While Absa's biggest shareholders must approve any deal, Pretoria must ultimately OK any such a transaction.
Trevor Manuel, South Africa's Finance Minister, said Thursday that the country's policy of keeping its four main banks locally owned and regulated still stands, but the government might consider shifting its position.
Absa, which has more than 31,000 staff, 668 branches and more than 4,500 ATMs, reported a 21 percent increase in annual headline earnings per share in May.