Barclays Auctions a €20 Bn Worth of Assets in Spain

6/06/2014 – Expansion

The bank provides potential buyers with detailed information about its branch in Spain whose sale embraces 260 offices, 575.000 customers (with €9 billion deposits) and €18 billion in credits.

Out of the €18 billion loan portfolio of the Spanish affiliate of Barclyas, €15 billion corresponds to mortgages. Out of these, €10 billion has got a 0.5% + Euribor differential rate. In spite of the low profitability, the portfolio has got an only €522 million part of sub-performing loans, around 3.4% of the total. Default on the entire package posts 11%, compared to the average of 13.61% showed by the sector at the end of 2013.

By regions, almost a half of the assets (€10 billion) are found in Madrid. Barclay´s branch has been also very active in Catalonia, Andalusia, Valencia and the Canary Islands.

Barclays Capital has rescued itself with a €3 billion share issue for the wholesale market and received a €5 billion bail-out from the ECB.

 The €20 billion in assets refers only to Retail and Business Banking (RBB) which implies that the private bank, investment bank, corporative bank and credit cards (Barclaycard) are not included in the sale. The retail division lost net €202 million in 2013, mainly due to considerable cuts in staff (890 employees dismissed) and office number (160 units closed). Gross margin of €432 million was insufficient to compensate general costs of €497 million and €137 million of loss proceeding from asset damage.

Prior to receiving the information flash, interested buyers, among which reverberate such big name entities as CaixaBank, BBVA, Sabadell and Bankinter, had to sign a non-discloser agreement and soon will be allowed to make themselves home in the data room. Other possible purchasers could be Popular, Banca March, BES, Apollo and Centerbridge.

Antony Jenkins, the group´s director, expects to obtain around €1.5 billion from the sale.


Original article: Expansión (by S. Saborit & J.Zuloaga)

Translation: AURA REE