Barclays Plans to Sell About $15 Billion Italy Loans in 2 Years

  • Focus is on business with sustainable returns: Perrazzelli
  • Italy corporate, investment banking performing very well

Barclays Plc plans to sell about 13 billion euros ($14.8 billion) of loans at its Italian unit as the U.K. bank refocuses its overseas operations on investment and corporate banking.

“Barclays is starting the disposal of its portfolio of performing and non-performing loans, the last step of the bank’s exit plan from the Italian retail business,” country chief Alessandra Perrazzelli said in an interview in Cernobbio, Italy on Friday. “We are selling the complete portfolio of loans and we aim at closing the disposal of the whole portfolio in one or two years, depending on market conditions. We are now testing investors’ appetite.”

Barclays is refocusing on the lender’s most profitable units in the U.K. and U.S. and selling consumer operations in continental Europe that it doesn’t consider central to its business. Britain’s second-largest bank sold its operations in Portugal to Spain’s Bankinter SA in September, while Mediobanca SpA agreed to absorb Barclays’s consumer-banking operations in Italy in December.

“Barclays has been working to simplify its business and to concentrate on those businesses where it can make sustainable returns and compete with the big American players,” said Perrazzelli. “This process is also involving Italy, where our investment and corporate banking businesses perform very well.”

The corporate division in the country is shifting toward bigger firms that can be better served from an international bank, said the manager, while investment banking is focusing on M&A and equity capital markets and client advisory.

Italy Banks

“Italy’s banking system is paying for a lack of transparency and a proper governance system,” said Perrazzelli. “The country is now seeking to address these issues also with government reforms that are pushing toward industry consolidation. We are going in the right direction, but we are moving late.”

Barclays planned debt disposal comes at a time when a number of banks are exploring sales of bad loans in response to pressure from European regulators. Prime Minister Matteo Renzi is seeking to restructure the country’s financial industry to reduce an estimated 360 billion euros in soured loans and bolster the euro-area’s third-largest economy as it recovers from recession.

The government and central bank are in talks with major financial institutions over creating a fund that would buy bank shares and help the lenders tackle non-performing loans, according to people with knowledge of the discussions.

“The constitution of a fund that may address bad loans and banks’ capital issues may be an important trigger in reviving foreign investors’ interest,” she said. “It should be done swiftly, with full transparency and in compliance with European rules.”

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