Barclays close to hat-trick of deals

Barclays' Canary Wharf HQ

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The British bank is set to announce the completion of the sale of its Italian retail business in the coming days, according a person familiar with the matter. Barclays’s Iberian credit cards unit is also on track to be sold, and the bank is in advanced discussions with two bidders for its Egyptian franchise, this person added.

Investors are watching the global retreat carefully.

Like other European banks, Barclays is looking pare back its sprawling business amid low interest rates and increased regulatory pressure. The bank’s Chief Executive Jes Staley pledged to unload £35billion of unwanted assets by the end of 2017 to bolster its capital levels. To soak up losses on the sales, the bank cut dividend payouts in 2016 and 2017.

Barclays’ return on equity, a measure of profitability, was 4.8% in the first half of the year. Once unwanted assets are stripped out, the bank’s management hope returns should tick-up into double digits.

Following the Brexit vote, some analysts feared the bank’s slim down would slow, or deals would be renegotiated, as investors fretted about muted European growth.

Several big disposals were signed before the EU referendum. Barclays announced last December that it had agreed to sell Italian retail business to CheBanca, part of the banking group Mediobanca Banca di Credito Finanziario. The deal will see Barclays book a loss of about £200 million but some £500 million of risk adjusted assets will be stripped off its balance sheet. The Italian bank employs 400 people and is made up of 89 branches.

On August 24 Barclays announced it netted £615 million selling its risk analytics business to Bloomberg. Other deals that are in the pipeline including selling the bank’s Asian wealth business and shedding more of its 50% stake in Barclays Africa. Barclays is also in the process of disposing of its French retail unit.

Write to Max Colchester at max.colchester@wsj.com

This article was published by The Wall Street Journal

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