Barclays Getting Out Of Italian Retail Banking Biz

In the latest move by Barclays to pare down its retail banking operations, the firm announced Thursday (Dec. 3) that it has reached a pact to unload its retail unit based in Italy to CheBanca, which is a unit of Italy’s Mediobanca Group.

The New York Times said the move is the most recent in a continued effort to jettison lesser performing units and focus instead on core operations. The retail footprint is being reduced under the initiative of Antony Jenkins, who stepped down as CEO in July, and is likely to be a hallmark of the new leadership of James E. Staley.

Under the terms of the new agreement and the Italy exit, Barclays will sell 89 branches with 220,000 clients that have an attendant portfolio worth more than $3 billion in residential mortgages. The deal, said NYT, gives a boost to Mediobanca’s asset management operations.

For its part, CheBanca, which was founded relatively recently in 2008, would have 146 branches across the country and, post-transaction, would be home to about 1,500 employees.

Barclays is not leaving Italy completely, however. The company will continue to run its investment banking and corporate banking businesses and will have at least some footprint in the retail mortgage business.

The financial impact of the transaction? Barclays will book an after-tax loss of just about $300 million. The deal is expected to close in the second quarter of 2016.

The push continues Barclays’ focus on corporate and retail banking operations in Britain; the investment bank; the eponymous Barclaycard unit; and the banking business that has been developing in Africa. To that end, its European footprint continues to dwindle, as it sold its Spanish retail banking operations and also some other units in Portugal.