Proactive Investors - Barclays PLC (LON:BARC) has struck a deal to offload its German consumer banking business to Austrian bank Bawag for a "small premium to net assets", but said the sale would not increase how much capital it would return to shareholders.
The cash sale of Hamburg-based Consumer Bank Europe is expected to release around €4 billion (£3.4 billion) of risk weighted assets, increasing its CET1 capital ratio by roughly 10 basis points on completion, which is expected within six to nine months.
"This is another example of disciplined execution," said the FTSE 100-listed bank, referring to the plan presented at an investor update in February.
Consumer Bank Europe, which offers credit cards, consumer loans and deposits to customers in Germany and Austria, had gross assets of €4.7 billion at the end of March.
"The sale of Consumer Bank Europe aligns with our ambition to simplify Barclays," said Francesco Ceccato, CEO of Barclays Europe.
"This transaction will also allow Barclays Europe to focus on its corporate and investment banking and private banking businesses."
Bawag said the purchase was expected to make a profit before tax contribution of over €100 million in 2027 once the deal is fully integrated.