Barclays To Sell Spanish Businesses To CaixaBank For 800 Mln Euros

(RTTNews) - British lender Barclays plc (BCS, BARC.L) said Sunday that it has agreed to sell its Spanish retail and corporate banking operations to CaixaBank S.A. for 800 million euros, or about 630 million pounds. The sale is part of the company's efforts to divest its non-core, less-profitable businesses.

Under the deal, Barclays said it will sell its Retail Banking, Wealth and Investment Management and Corporate Banking businesses in Spain to CaixaBank, Spain's third-largest lender. The businesses being acquired by CaixaBank represents total assets of 22.2 billion euros and liabilities of 20.5 billion euros.

However, Barclays' Investment Bank and Barclaycard operations are not part of the sale of the Spanish businesses, the company said.

The consideration of 800 million euros is payable in cash upon completion and subject to adjustment based on the statutory net asset value or NAV as at December 31, 2014. On completion of the sale, about 2,400 Barclays employees and 262 branches will transfer to CaixaBank.

Barclays said it will incur a loss after tax of 400 million pounds on the transaction that will be recorded in the third quarter of 2014, and will also incur a loss of 100 million pounds upon completion of the deal.

The company noted that following the transaction, its risk-weighted assets will decrease by about 8 billion pounds on a proforma basis, while its leverage exposure will decline by 15 billion pounds, as of June 30.

Barclays also said it completed the sale of its UAE Retail Banking business to Abu Dhabi Islamic Bank at an estimated pre-tax gain of 119 million pounds. The company noted that UAE transaction is confined to a portfolio of mortgages.

The company had said in early April that it agreed to sell its retail banking business in the UAE to Abu Dhabi Islamic Bank or ADIB. Subject to UAE Central Bank approval, the company noted that the transaction is likely to cost 650 million dirhams.

Antony Jenkins, Chief Executive of Barclays Group , said, "I am pleased to be announcing further progress on Barclays Non-Core asset reductions through the transactions announced today. We remain on track to rebalance Barclays as part of our strategy to deliver sustainable returns for our shareholders."

Barclays is targeting a reduction in non-core investment bank risk-weighted assets or RWAs to about 50 billion pounds, and leverage exposure to around 180 billion pounds by the end of 2016. It also expects to grow capital at the Group level over the period to 2016.

In early May, Barclays said it plans to cut about 7,000 jobs at its investment bank by 2016 as part of its efforts to reduce costs and achieve returns as well as growth. The bank also said overall 2014 Group gross headcount reduction has been increased to 14,000.

The company added that it plans to create Barclays non-core, and will exit or run down assets consisting of about 115 billion pounds, which do not fit the strategic objectives or returns criteria under its strategy review.

BCS closed Friday's trading at $15.00, up $0.02 or 0.13 percent on a volume of 875,910 shares.