Barclays announced on Thursday that it is selling its German consumer finance business to Austrian bank BAWAG Group AG for a small premium to net assets.
This move aligns with the British lender's strategy to streamline its operations.
The cash sale by Barclays Europe is expected to free up approximately 4 billion euros ($4.32 billion) of risk-weighted assets, thereby enhancing Barclays' Common Equity Tier 1 (CET1) ratio—an indicator of capital strength—by around 10 basis points.
The German business, known as Consumer Bank Europe, caters to customers in the German and Austrian markets and reported gross assets of 4.7 billion euros at the end of March, primarily in card and loan receivables.
"The sale of Consumer Bank Europe aligns with our ambition to simplify Barclays," stated Francesco Ceccato, CEO of Barclays Europe. He emphasized that the transaction would enable the bank to concentrate on its corporate, investment banking, and private banking sectors.
Ceccato added, "We remain committed to our broader German and European operations and look forward to continued growth in the region during 2024 and beyond."
The deal's completion is anticipated within six to nine months, pending regulatory and legal approvals. Photo by David Edgar, Wikimedia commons.