Barclays in deal to sell Italian branches
As part of the transaction, lender to refinance unit with €237m before passing it to CheBanca!
Barclays has agreed to sell its Italian bank branches to CheBanca!, the seven year-old retail arm of Mediobanca, the banks said yesterday, confirming a Reuters report.
The disposal is the latest by Britain’s third-biggest bank by market capitalisation as it looks to sell its continental European retail banking operations and focus on its core business, which includes corporate and investment banking.
Mediobanca said in a statement that under the deal CheBanca! would acquire 89 branches from Barclays with 220,000 clients, residential mortgage loans worth €2.9 billion (Dh11.2 billion) and 620 staff. As part of the transaction, Barclays will refinance the unit with €237 million before passing it to CheBanca!.
The deal will have a 20-basis point negative impact on Mediobanca’s capital which the bank said would be gradually recovered from earnings growth post-integration. In a separate statement, Barclays said the deal would result in a reduction in its risk weighted assets of around £800 million on completion, and an after-tax loss of £200 million, bookable in the fourth quarter of 2015.
Tier 1 capital ratio
The deal would also result in a small decrease in its core Tier 1 capital ratio and tangible net asset value.
Barclays said it would continue to operate investment banking and corporate banking services in Italy, and would also continue to manage its remaining retail mortgage portfolio. “This transaction is further evidence of the reshaping of Barclays Group to focus on our Core businesses,” said Jes Staley, Barclays Group Chief Executive Officer.
“We continue to make progress in the reduction of Barclays Non-Core as we target risk weighted assets of around £20 billion at the end of 2017.” Barclays has sold its retail banking operations in Spain and Portugal, but kept some activities, such as investment banking and credit cards, and is still looking to sell assets in France.