Barclays Agrees to Sell Egyptian Unit to Attijariwafa Bank

  • Deal cuts $2.6 billion of risk-weighted assets from books
  • Continues CEO Jes Staley’s global retreat to boost returns

Barclays Plc agreed to sell its Egyptian business to Morocco’s Attijariwafa Bank as the British firm shrinks its global operations and speeds up the sale of unwanted assets.

The deal will probably be completed by the end of this year, the London-based lender said in a statement Tuesday. The disposal will boost the bank’s common equity Tier 1 ratio by 0.1 percentage point, reducing risk-weighted assets by about 2 billion pounds ($2.6 billion). Terms of the deal weren’t disclosed.

Chief Executive Officer Jes Staley is retreating from Africa and focusing on the U.K. and U.S. to boost capital and simplify the lender after it came under pressure from investors to improve returns. Barclays sold about one-fifth of its stake in Johannesburg-based Barclays Africa Group Ltd. in the market earlier this year, leaving it with just over 50 percent, and has also closed offices in seven countries in Asia.

The Egyptian business, which dates back to 1864 and is aimed mainly at retail banking, employs 1,500 people and has 56 branches in cities including Cairo, Giza and Alexandria. The unit may be worth more than $500 million, a person with knowledge of the sale said in February. The deal follows the 2014 sale of its retail banking business in the U.A.E to Abu Dhabi Islamic Bank PJSC for 650 million dirhams ($177 million).

Toxic Assets

Staley has made shrinking and closing the non-core division, which houses the firm’s unwanted or toxic assets, a priority since taking over last year. As of June 30, about 47 billion pounds of risk-weighted assets remained to be sold from the unit, which the bank aims to shutter by the end of next year.

Other planned disposals this year include its French consumer operations, the transfer of a portfolio of derivatives contracts to JPMorgan Chase & Co., and the sale of one of Europe’s largest gold vaults.

Attijariwafa, the North African country’s biggest lender, is drawing up plans to expand into East Africa, especially Kenya and Ethiopia, and is also very keen on Nigeria and Ghana in the west of the continent, Chief Executive Officer Mohamed El Kettani said in February. The bank operates in at least 23 countries including Tunisia, Niger, Gabon and Cameroon.

The bank started expanding abroad in 2005 as growth opportunities in Morocco became more limited. It had expressed an interest in buying an Egyptian business from Greece’s Piraeus Bank SA, which was sold last May to Al-Ahli Bank of Kuwait.

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