Barclays to Sell German Consumer Finance Business Amid Strategic Shift

05 Jul, 2024

Barclays to Sell German Consumer Finance Business Amid Strategic Shift

On July 4, 2024, Barclays (BARC.L) announced it is selling its German consumer finance business to Austrian bank BAWAG Group AG (BAWG.VI) for a small premium to net assets. This strategic move is part of Barclays’ plan to streamline its operations and simplify its business model. The sale will enable BAWAG to expand its loan book and increase its customer base in the German and Austrian markets.

Reuters reported that BAWAG was a top contender in the bidding process, which included various European banks and private equity firms. The cash sale is expected to free up approximately 4 billion euros ($4.32 billion) in risk-weighted assets and boost Barclays' CET1 ratio by about 10 basis points. While the exact sale price was not disclosed, the transaction is set to conclude within six to nine months, pending regulatory and legal approvals. Consumer Bank Europe, the unit being sold, had gross assets of 4.7 billion euros as of March and has been operational in Germany since 1991, serving customers primarily through card and loan receivables.

Francesco Ceccato, CEO of Barclays Europe, stated that this sale aligns with the bank's ambition to focus on corporate, investment, and private banking sectors while continuing to grow in Germany and across Europe. Both Barclays and BAWAG shares saw a slight increase of around 1.1% in early trading, reflecting the broader European banking index.