The FINANCIAL — Barclays Bank PLC has on September 2 agreed to sell its Retail Banking, Wealth and Investment Management businesses and part of its Corporate Banking business in Portugal which serves small and medium-sized enterprises to Bankinter, S.A.. It has also agreed to sell its insurance business in Portugal to Bankinter Seguros de Vida, S.A. Seguros y Reaseguros, which operates an insurance joint-venture with Mapfre, S.A.
Barclays will continue to operate Barclaycard, investment banking and multinational corporate banking in Portugal.
The financial impacts of this transaction on Barclays are dependent, among other things, on the profitability of the businesses and foreign exchange movements up to completion. The current estimate is that the transaction will result in a pro forma decrease in risk weighted assets of approximately £1.7bn on completion, along with a loss after tax of approximately £200m, part of which will be booked in Q3 2015. The transaction is expected to result in a small increase in Barclays CET1 Ratio, while tangible net asset value is expected to slightly decrease, according to Barclays.
On completion, it is expected that approximately 1,000 Barclays banking and insurance employees, and 84 branches, will transfer to Bankinter and Bankinter Vida. Completion is subject to, among other things, regulatory approvals, and is expected to occur in Q1 2016.
John McFarlane, Barclays Chairman, said: “I am pleased to be announcing further reductions in Barclays Non-Core through the transactions announced today. We remain on track to rebalance Barclays as part of our strategy to deliver sustainable returns for our shareholders.
“I want to take this opportunity to thank our Portuguese colleagues in the businesses we are selling for their hard work and professionalism which has built strong customer and client relationships over many years and has made these businesses so attractive to Bankinter and Bankinter Vida. 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.”
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