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Barclays takes EUR260 million loss from Italian mortgage book sale

Wed, 24th Apr 2024 19:38

(Alliance News) - Barclays PLC on Wednesday said it would book a EUR260 million pretax loss after agreeing the disposal of its Italian mortgage portfolio.

The high street lender expects to take the loss in the year to December while the deal will also release around EUR0.9 billion of risk-weighted assets at completion.

The portfolio represents the majority of Barclays' overall Italian retail mortgage book and the transaction is expected to be broadly neutral to Barclays' CET1 ratio, the company said.

Barclays said the deal values the portfolio at around EUR3.3 billion and as a result of the proposed securitisation, Barclays will receive cash proceeds of around EUR400 million.

The lender said the deal is in line with its ambition to simplify Barclays and support its focus on growing its key businesses. The transaction is not expected to impact the planned financial distributions of Barclays.

Barclays said the transaction is expected to be financed via a securitisation.

Funds and accounts managed by GoldenTree Asset Management LP have entered into a commitment letter under which they will purchase certain notes to be issued by a newly incorporated entity, Miltonia Mortgage Finance Srl, to which the portfolio is expected to be transferred.

Proceeds will be used for general corporate purposes.

Completion is expected in to occur during the second quarter.

Shares in Barclays closed up 0.2% at 192.56 pence in London on Wednesday.

By Jeremy Cutler, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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