Barclays Agrees to Sell German Consumer Finance Business to Austria's Bawag

By Elena Vardon

Barclays agreed to sell its German consumer finance business to a subsidiary of Austrian bank Bawag Group as it continues with its plan to simplify its business.

The British lender on Thursday said that its Hamburg-based Consumer Bank Europe--which offers diversified retail banking services to the German and Austrian markets--will be bought for a small premium to net assets which will be paid in cash when the deal closes.

Barclays Consumer Bank Europe had 4.7 billion euros ($5.07 billion) in gross assets, mostly from card and loan receivables, as of March 31, it said.

The sale should release around EUR4.0 billion in risk-weighed assets and raise Barclays' common equity Tier 1 ratio--a measure of capital strength--by around 10 basis points on the deal's completion, which is expected within six to nine months, subject to approvals.

For Bawag, the transaction is expected to represent a pretax profit contribution of more than EUR100 million in 2027 after the unit is integrated, the Austrian group said in a separate statement.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

July 04, 2024 03:04 ET (07:04 GMT)

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