Barclays Sells German Consumer Finance Business

Barclays (BARC.L) has announced the sale of its German consumer finance business, Consumer Bank Europe, to Austrian bank BAWAG Group AG (BAWG.VI). The deal, aimed at simplifying Barclays’ operations, will allow BAWAG to expand its loan portfolio and customer base in the region.

The sale of the Hamburg-based unit is expected to release about 4 billion euros ($4.32 billion) in risk-weighted assets and boost Barclays’ CET1 ratio, a measure of capital strength, by approximately 10 basis points. The sale price was not disclosed.

Consumer Bank Europe serves customers in Germany and Austria, with gross assets of 4.7 billion euros as of March, primarily in card and loan receivables. Francesco Ceccato, CEO of Barclays Europe, stated that the sale aligns with Barclays’ strategy to focus on corporate, investment banking, and private banking businesses. He emphasised the bank’s commitment to its broader German and European operations, anticipating continued growth in the region.

The transaction is expected to be completed within six to nine months, pending regulatory and legal approvals. Barclays’ consumer finance operation, which employs about 700 people, began operating in Germany in 1991. The sale follows a trend of Barclays reducing its retail operations in Europe, influenced by more conservative consumer spending habits post-COVID-19.

Following the announcement, shares of both Barclays and BAWAG rose by around 1.1%, in line with the European banking index.