1st Sep 2014 05:53
LONDON (Alliance News) - Barclays PLC on Sunday said it has agreed to sell its retail banking, wealth and investment management, and corporate banking businesses in Spain to CaixaBank SA, as the British lender continues to put into action its plan to scale back in areas that don't meet its targeted returns.
In a statement, Barclays said it is selling the Spanish businesses, which have EUR22.2 billion in assets and EUR20.5 billion of liabilities, for EUR800.0 million in cash, though the final amount is subject to adjustment based on statutory net asset value on December 31.
The investment bank and Barclaycard operations are not part of the disposal, and Barclays said it is committed to the retained businesses.
The assets marked for disposal had been placed into Barclays' non-core unit, created under a restructuring unveiled in May, under which the bank detailed plans to improve returns across the group. At the time, Chief Executive Antony Jenkins told journalists at the time that he expected consolidation in Western European banking, a factor behind the decision to put the assets into the newly created non-core unit.
Barclays estimated Sunday that the deal will result in a loss after tax of about GBP400.0 million to be reported in the third quarter, plus a loss of about GBP100.0 million on completion. It is, however, expected to reduce leverage exposure, as recorded on June 30, by GBP15 billion; result in a GBP8.0 billion proforma decrease of risk-weighted assets; and give a 12-basis-point boost to Barclays' June 30 fully loaded common equity Tier 1 ratio.
The deal will result in the transfer of about 2,400 Barclays employees and 262 branches to CaixaBank on completion, which is expected to occur at, or shortly after, the end of the year.
In addition, Barclays said it Sunday completed the sale of its UAE retail banking businesses to Abu Dhabi Islamic Bank at an estimate pretax gain of GBP119.0 million.
The UAE deal is confined to a portfolio of mortgages, unsecured credit and deposits, according to Barclays' statement.
"I am pleased to be announcing further progress on Barclays non-core asset reductions through the transactions announced today. We remain on track to rebalance Barclays as part of our strategy to deliver sustainable returns for our shareholders," Chief Executive Antony Jenkins said in a statement.
By Samuel Agini; [email protected]; @samuelagini
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