Barclays Plc is preparing the sale of its consumer finance business in Germany and has held preliminary talks with potential buyers, according to people familiar with the matter.
The British bank may seek about 500 million euros ($557 million) for the unit, formerly known as Barclaycard Germany, the people said, asking not to be named as the discussions aren't public. The division, based in Hamburg, houses 700 employees and could attract interest from other banks and private equity funds that own a bank, they said.
Deliberations are ongoing and it's possible that Barclays may not proceed with a deal, the people said. A representative for the lender declined to comment.
The potential disposal is adding to signs that Barclays Chief Executive Officer C.S. Venkatakrishnan is stepping up efforts to review the bank's footprint across business lines and geographies, which could lead to further exits. For instance, Barclays has recently initiated the sale of a portfolio of Italian loans, and is separately working with Boston Consulting Group to evaluate its strategy.
The German division has 2 million clients and had a loan book, or assets, of £4.3 billion ($5.6 billion) at the end of last year, according to filings. Any purchase price would depend on the profitability of the business, which hasn't been disclosed. The unit is profitable, the people said.
The business is deposit-taking and offers revolving credit cards as well as loans for small-ticket items. In Germany for instance, it competes with Hanseatic Bank, which is owned by French lender Societe Generale. The potential sale could serve as a benchmark for other lenders considering selling their own consumer finance businesses.
While a sale could free up some risk-weighted assets for Barclays, it may also shed some light on the CEO's thinking. Barclays, which sees itself as one of Europe's last remaining global investment banks, has touted the importance of that business and is currently grappling with an exodus of senior M&A bankers in the U.S.
Barclays financial results have been recently boosted by its performance in trading helped by market volatility. Yet the bank has said it's not satisfied with the share price performance. Second-quarter results are due later this month.
— With assistance from Marion Dakers
