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LONDON (Alliance News) - Barclays PLC on Thursday said it agreed to sell its Barclaycard consumer payments business in Portugal and Spain to Bancopopular-e, a Spanish online bank 51%-owned by Varde Partners and 49%-owned by Banco Popular Espanol SA.
The business, which consists of about GBP1.0 billion of assets, is being sold at a "small" premium to gross receivables, Barclays said in an emailed statement, and its sale will also cut costs in the bank's non-core division of unwanted assets.
Barclays estimates that the transaction will decrease non-core risk-weighed assets by about GBP900.0 million. The Barclaycard business in Spain and Portugal was moved into non-core in March, the bank said. Customers and employees will also transfer to Bancopopular-e. The transaction, which requires regulatory approval, is expected to complete by the end of 2016.
"I am delighted by the speed with which we are continuing to reduce our non-core exposure and costs. Our credit card operation in Spain and Portugal is a very good business with a highly talented and dedicated workforce but no longer fits with our strategic ambitions," Chief Executive Jes Staley said in a statement.
The sale of the Barclaycard business in Spain and Portugal is another step towards meeting the bank's target of reducing risk-weighted assets in non-core to about GBP20 billion in 2017.
Staley, who has intensified the reduction of the non-core unit since becoming chief executive late last year, in March even told shareholders Barclays will pay a reduced dividend of 3.0 pence per share in both 2016 and 2017, down from 6.5p in 2015, to give the bank greater flexibility in achieving his goals.
According to Barclays' first-quarter results on Wednesday this week, risky assets in the non-core unit fell by GBP3.0 billion to GBP51.0 billion in the three months ended March 31.
A further GBP3.4 billion of risk-weighted assets should be cut on completion of agreed sales of Barclays' Asian wealth business and retail operations in Portugal and Italy, and Barclays is in talks to exit branch-based retail banking on the European mainland by selling its branch network in France to private equity firm AnaCap Financial Partners.
Barclays said its corporate and investment banking businesses in Spain and Portugal remain "important elements" within its franchise.
Shares in Barclays were down 1.1% at 172.90 pence Thursday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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