Barclays to make a £500m loss on its Spanish arm as it agrees sale to CaixaBank

Billy Ehrenberg
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Barclays is making a £500m loss on the deal (Source: Getty)

Barclays has agreed to sell its Spanish business to CaixaBank, Spain's third-largest lender, for €800m (£630m).

The bank will make a £500m loss on the deal to sell its Spanish retail banking, wealth and investment management, and corporate banking businesses, but leverage exposure will be trimmed to the tune of £15bn.

Shares in Barclays were up 0.45 per cent in early trading.

The sale is a coup for CaixaBank, with the Catalan outfit netting Caixa 250 branches and 550,000 new clients, a healthy number of whom are wealthy customers with deposits in excess of €100,000.

The Spanish banking sector took a huge hit in the aftermath of the financial crisis, with flailing giant Bankia needing a bailout and many regional banks struggling.

Spain's three largest banks, Banco Santander, BBVA and CaixaBank stand head and shoulders above their smaller competitors as Spain's economy crosses its fingers that GDP growth of 2.1 per cent the European Commission is forecasting for 2015 materialises.

Barclays has spent several years engaged in a programme of selling off certain non-core assets as part of a drive to strengthen its balance sheet. Chief executive Antony Jenkins 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.

In April, Barclays sold its retail banking interests in the United Arab Emirates to the Abu Dhabi Islamic bank, although as the statement makes clear, not everything is being offloaded:

Barclays' Investment Bank and Barclaycard operations are not part of the disposal of the Spanish Businesses, while the UAE transaction is confined to a portfolio of mortgages, unsecured credit and deposits. We remain committed to our retained businesses in these territories.

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