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MADRID, May 22 (Reuters) - Britain's Barclays issounding out potential buyers for its Spanish retail bank,people familiar with the matter said, adding that local peersand private equity firms could be interested in parts of thebusiness.
Barclays earlier this month outlined a major restructuringand as many as 19,000 job cuts as it refocuses on its Britishand African businesses, investment banking in the UK and UnitedStates, and credit cards.
It will park its retail banking operations in Spain, Italy,France and Portugal in a "bad bank", and these will be sold,separated or floated.
Barclays is contacting potential bidders with preliminaryinformation about the Spanish unit and confidentialityagreements, two banking sources familiar with the process said,adding no formal auction was yet underway.
"Everyone knows all (the European businesses) are for sale,but Spain seems to be priority or the one getting interest," onebanker said.
Private investment firms are expected to vie for the retailnetwork, three sources said. Centerbridge Partners, which boughtloan servicing company Aktua from Santander in Spainand has been a bidder for debt packages being sold by localbanks, could be among those interested, one of the people said.
Apollo Global Management, which has bought Spain'ssmall Evo Banco, could also be a candidate, the person said.
Spain's top banks, Santander, BBVA and Caixabank, would be among those approached, two people said,while two further sources said smaller Bankinter couldwant to pick up private banking operations from Barclays.
The Spanish banks, Barclays and Apollo declined to comment.Centerbridge could not immediately be reached for comment.
The UK bank may end up having to split the unit or sell offloans if it does not get a bid for the whole division. Spanishbanks are themselves cutting offices and costs as they recoverfrom an economic slump and a property market crash.
"The decision on what assets Barclays will sell could comebefore the end of the week," another banking source said.
Like other banks seeking to exit retail banking in Spain,such as Citigroup, Barclays is likely to keep a team oflocal investment bankers, as an economic recovery spursdealmaking. It has so far been handling the Spanish disposalwith its own team of advisers, according to two sources.
Barclays expanded rapidly in Spain, including with the 1.1billion euro ($1.5 billion) purchase of Banco Zaragozano in2003, but hit problems from big losses on corporate loans andthe recession. The bank's European retail business has lostalmost 2 billion pounds ($3.4 billion) over the last four years.
Barclays shut or sold 161 branches in Spain last year,reducing the network by more than a third to 270. Aboutone-third of staff were cut, leaving roughly 2,100 in thebusiness.
It sold some of the branches to small local savings banks,including 14 to Caja Rural Castilla-La Mancha in October.
($1 = 0.5925 British Pounds)
($1 = 0.7323 Euros) (Reporting by Sarah White and Jesus Aguado in Madrid and SteveSlater and Anjuli Davies in London; Editing by Mark Potter)
