Barclays Bank Ireland (Barclays Europe) has agreed to divest its German consumer finance business to Austria-based bank Bawag Group for an undisclosed sum.
The German consumer finance business is a diversified retail banking business. The unit comprises established credit card, consumer loan and deposit franchises catering to customers in the German and Austrian markets.
It had gross assets of €4.7bn, as of 31 March 2024. These mainly consist of card and loan receivables, including nearly €2bn in credit card receivables.
The all-cash deal by Barclays Bank Ireland is expected to release about €4bn of risk-weighted assets (RWAs) and will increase the CET1 ratio by about 10 basis points.
Barclays Europe CEO Francesco Ceccato said: “The sale of Consumer Bank Europe aligns with our ambition to simplify Barclays. In BAWAG, we believe we have found a strong and committed owner for the business’ journey forwards.
“This transaction will also allow Barclays Europe to focus on its Corporate and Investment Banking and Private Banking businesses. We remain committed to our broader German and European operations and look forward to continued growth in the region during 2024 and beyond.”
Through the acquisition, Bawag Group aims to expand its footprint in the DACH/NL region. The transaction is also expected to position the Austrian bank for future growth in one of the bank’s core markets.
Once the deal is fully integrated, Bawag Group will achieve a long-term value with an estimated profit before tax contribution of over €100m in 2027.
Bawag Group CEO Anas Abuzaakouk said: “This acquisition provides us with a German consumer lending platform focused on credit cards, personal loans, and savings products across a large and diverse customer base.
“We look forward to welcoming the whole team and building on the strong foundation that has been established. This is the second acquisition we have signed in 2024, planting the seeds for continued profitable growth in the years ahead.”
Subject to customary conditions and regulatory approvals, the deal is anticipated to be completed in Q4 2024 or Q1 2025.
