Britain's Barclays to sell Spanish assets to Caixabank
MADRID (Reuters) - Barclays (BARC.L: Quote) is selling its Spanish retail and corporate banking operations to Caixabank (CABK.MC: Quote), the two companies said on Sunday, as the British bank starts shrinking its struggling European divisions as part of a major overhaul.
Caixabank, Spain's third-biggest lender and one of the most acquisitive banks during the recent financial crisis, said it would pay 800 million euros ($1.05 billion) for the Barclays businesses. The deal also includes wealth management.
The sale marks one of the first big steps in Barclays' bid to exit most of its European retail banking businesses, after Chief Executive Antony Jenkins embarked on a turnaround plan earlier this year to try and lift profitability.
Barclays will make thousands of job cuts in the next three years as part of the restructuring and has said it wants to refocus on its British and African businesses, credit cards and investment banking in Britain and the United States.
It has been gradually selling off units it now considers non-core - including its United Arab Emirates retail banking business, sold to Abu Dhabi Islamic Bank in a deal also completed on Sunday - and began sounding out potential buyers for parts of its Spanish business in May this year.
"We remain on track to rebalance Barclays," Jenkins said in a statement on the sale.
Barclays will make a loss after tax on the sale of about 500 million pounds, with 400 million pounds of that to be reported in the third quarter of 2014 and the rest on completion of the deal, it said.
The British bank expanded quickly in Spain in the early 2000s, but a prolonged recession brought losses on corporate loans and it had to close dozens of bank offices and cut jobs.
As the country returns to growth and Spanish banks' fortunes start to improve after they suffered steep losses from a 2008 property crash, some international lenders such as Citigroup (C.N: Quote) are also jumping at a chance to sell their retail banks. Continued...