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LONDON (Alliance News) - Barclays PLC on Wednesday said it is selling a range of non-core operations in Portugal at a likely loss of about GBP200 million, as it seeks to cut risk-weighted assets and improve returns to shareholders.
The FTSE 100 bank said it has agreed to sell its retail banking, wealth and investment management businesses in Portugal, as well as part of its corporate banking business which serves smaller businesses, to Spanish lender Bankinter SA. According to Bankinter, it is to pay about EUR100 million for the operations.
Barclays also agreed to sell its Portuguese life insurance and pensions business to Bankinter Seguros de Vida, a joint venture between Bankinter and Spanish insurer Mapfre SA. According to Bankinter, the joint venture is to pay EUR75 million for the business. Some operations in Portugal are to be retained.
"We will continue to operate our Barclaycard, investment banking businesses and service our multinational corporate clients in Portugal. We believe these are areas where we continue to have a competitive advantage," Barclays Chairman John McFarlane said in a statement.
Barclays currently expects the deals to reduce its risk-weighted assets by GBP1.7 billion on completion, while part of the GBP200 million loss after tax will be booked in its results for the third quarter. Its common equity tier one ratio, a key measure of financial strength for banks, is expected to experience a "small increase" due to the deal, while tangible net asset value is set for a slight decrease. The final changes to the bank's finances depend on the profitability of the businesses being sold and foreign exchange movements up to completion.
The deals are expected to complete in the first quarter of 2016, and will see about 1,000 employees and 84 branches transfer to Bankinter and Bankinter Vida.
"We remain on track to rebalance Barclays as part of our strategy to deliver sustainable returns for our shareholders," McFarlane said.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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