Barclays announces major overhaul to 'simplify business' - move set to release £3.4bn and 'cut costs'
The move will generate a higher return to investors
PA
Barclays has announced a major overhaul in its latest efforts to simplify how the business is run.
The high street lender has agreed to sell its German consumer finance arm to an Austrian bank.
The deal will see its Hamburg-based division offloaded to a subsidiary of BAWAG Group, a commercial banking group with customers across Europe and the US.
Barclays’ consumer bank – which offers credit cards, loans and savings to customers in Germany and Austria, and employs about 700 staff – has assets totalling €4.7billion (£4bn).
Barclays did not reveal the price of the deal, but said it would get a “small premium” to the value of its net assets.
It is also expected to release about €4bn (£3.4bn) of risk-weighted assets – meaning the amount of capital a bank must keep in reserve to account for unexpected losses.
The sale follows Barclays unveiling sweeping plans to strip out about £2 billion in costs in the coming years
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The sale follows Barclays unveiling sweeping plans to strip out about £2bn in costs in the coming years and home in on five key divisions going forward.
It announced the structural shake-up earlier this year as part of efforts to improve its financial performance, simplify the business, and return more money to investors.
The lender also wants to cut costs so that it spends less money on running the business compared to how much cash it generates.
Francesco Ceccato, the chief executive of Barclays Europe, said the German sale “aligns with our ambition to simplify Barclays” and will allow the European group to “focus on its corporate and investment banking and private banking businesses”.
The news follows reports of savers missing out on extra cash due to failure to act.
Experts say customers with the big banks like Barclays, Lloyds, NatWest, HSBC and Santander should shop around for a better deal.
There may be better accounts with their existing banks they are unaware of.
Switching to a higher interest account could boost someone's savings by £233 extra each year on average on £10,000 savings.
A number of companies are offering accounts, either fixed-rate or easy access, with interest rates above 5 per cent, including Monument Bank, Oxbury, Chase, Raisin UK and Close Brothers.
Lucinda O'Brien, money.co.uk savings accounts expert, said: "If you do one thing today - check what interest you are earning on your savings.
"Interest rates have increased dramatically in recent years, but there are still many people that haven’t switched savings accounts.
"We conducted a survey to find out people’s savings habits in the UK, and it revealed 69 per cent of consumers haven’t switched savings accounts in the past two years.
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A number of companies are offering accounts, either fixed-rate or easy access, with interest rates above 5 per cent
GETTY"Of those people who haven’t switched, 51 per cent said the reason for not doing so was they were satisfied with their account and 27 per cent said they preferred to keep all their accounts with the same bank.
“However, this decision means that many people are likely earning a lot less interest than what is currently available in the market."