CaixaBank has acquired Barclay’s Spanish banking business after significant losses over the past four years.
One of the largest banks of United Kingdom, Barclays PLC announced its next mergers and acquisitions in this year, after acquisition of its retail business in United Arab Emirates by Abu Dhabi Islamic Bank in April. The bank sells Barclays Bank S.A.U. to CaixaBank, the third largest bank of Spain. The subsidiary of Barclays in Spain was bid for 800 million euros. The deal was bargained with the acquisition of wealth management and commercial banking divisions of the company. However Barclays confirmed that it keeps credit card and investment banking operations of the bank in Spain.
CEO of the company, Antony Jenkins explained the sales of its assets with changing corporate policies of the company. He declared that Barclays PLC alters locations of the capitals in different continents by shrinking its retail business operations in Europe and expanding credit card and investment banking in US, UK and Africa. After the sales of the South Western Subsidiary, it is expected that Barclays will cut thousands of jobs to compensate a four-year loss of $3.4 billion from retail banking divisions in South Western Europe.
In April 2014, S&P downgraded Barclays PLC from stable A to –A and clarified the reduction in credibility of the company as a change in regulation and government support in EU countries. However the credit rating agency didn’t make any changes to the corporate rating of CaixaBank. Luigi Motti, an S&P analyst, believes that CaixaBank’s takeover will have a limited impact on its financial credibility and it may be upgraded in the future if the company improves its performance.
– Goshgar Mikael, Editor (Business)
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