Barclays To Sell Its Egypt Business To Attijariwafa Bank
Zacks Investment Research | Oct 04, 2016 09:06PM ET
As part of its restructuring initiatives, Barclays (LON:BARC) PLC (NYSE:C) has agreed to sell its Retail and Corporate Banking business in Egypt to Attijariwafa Bank S.A., the biggest bank of Morocco in terms of revenue. The completion of the deal is subject to regulatory approvals and is anticipated to occur by the end of this year. Notably, the deal value was not disclosed.
Barclays is thus ending its 150 years of history in Egypt, where it has around 56 branches and 1,500 employees. The divestiture is expected to result in a benefit of 10 basis points in the bank’s Common Equity Tier 1 (CET1) ratio, as of Jun 30, 2016. Further, the deal is expected to reduce the bank’s risk weighted assets (RWAs) by approximately £2 billion ($2.55 billion).
The divestiture is in line with Barclays’ decision to focus on its U.K. and U.S. operations, while selling or minimizing its activities in Africa, continental Europe and Asia. Further, the restructuring is in view with the bank’s aim to simplify its structure and seek higher shareholder returns.
Barclays Group’s CEO Jes Staley said, "I am pleased to announce a further reduction in our Non-Core business. Today's announcement demonstrates our continued focus on improving the Group's returns and our ability to execute our strategy quickly."
Moreover, this move is in sync with Barclays’ plan to offload its Egyptian and Zimbabwean operations, since it decided to drastically cut back its African presence earlier this year. In May, the bank successfully sold a 12% stake in Barclays Africa Group. (Read more: Zacks Investment Research
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