Barclays Lose £500m in Spanish Bank Clearout
Barclays has announced that they’ve made losses of £500m on the sale of their Spanish banking division. This follows after they announced their plans to shed unprofitable businesses.
At a total cost of £632m, Barclays have sold off their retail banking, wealth, investment management and corporate banking business in Spain to the third-largest bank in Spain, Caixa Bank.
Caixa Bank is the third largest lender in Span and is owned by the Catalan savings bank La Caixa who has a 72.76% stake. They are headquartered in Barcelona and they primarily consist of the universal banking and insurance activities of the La Caixa group and they also have ties to the telecommunications company Telefónica.
On top of the Spanish bank clear-out, Barclays have also confirmed that they have sold their UAE retail banking business to Abu Dhabi Islamic Bank.
With this particular deal, Barclays are set to make a pre-tax gain of £119m on the sale of a portfolio of mortgages, unsecured credit and deposits.
The British bank are set to make a loss of around £500m on the Caixa deal; £400m of which will be booked in the third quarter of this year and the final £100m in the final quarter of the year.
Early on in the last decade, Barclays expanded quite rapidly in Spain buying Banco Zaragozano for €1.1bn in 2003. These banks then continued to operate under a brand name of Barclays but they soon ran into problems when the Spanish housing market collapsed and in turn started the deep recession in Spain.
According to Reuters, Barclays shut or sold around 160 branches last year and cut about a third of their workforce in the country and in May, Barclays added that they will be cutting 19,000 jobs worldwide which is set to include a dramatic reduction in their investment banking arm so that they can focus on areas where they have a competitive advantage.