Barclays PLC on Thursday agreed to sell its German consumer finance operation, Consumer Bank Europe, to a subsidiary of Vienna-based financial group Bawag Group AG as part of its strategic overhaul.

Shares in Barclays rose 1.4% to 221.10 pence in London on Thursday.

The London-based lender did not disclose financial details of the transaction but said Bawag will pay a small premium to net assets, payable in cash on completion.

As at March 31, Consumer Bank Europe had gross assets of €4.7 billion, primarily comprising card and loan receivables, Barclays said.

Consumer Bank Europe is a diversified retail banking business, with established credit card, consumer loan and deposit franchises serving customers in the German and Austrian markets.

Barclays said the disposal, through its Irish arm Barclays Bank Ireland PLC, would release around €4.0 billion of risk weighted assets, increasing Barclays’ CET1 ratio by around 10 basis points on completion.

Completion of the sale is expected to occur within six to nine months. The timing of completion does not impact Barclays’ previously announced capital return plans, the company added.

Barclays Europe Chief Executive Francesco Ceccato said: ‘The sale of Consumer Bank Europe aligns with our ambition to simplify Barclays. In BAWAG, we believe we have found a strong and committed owner for the business’ journey forwards.

‘This transaction will also allow Barclays Europe to focus on its Corporate and Investment Banking and Private Banking businesses. We remain committed to our broader German and European operations and look forward to continued growth in the region during 2024 and beyond.’

Barclays said the deal was another example of disciplined execution against the plan presented earlier this year.

In February, Barclays announced an operational overhaul, including substantial cost cuts, asset sales and a reorganization of its business divisions, while promising to return £10 billion to shareholders between 2024 and 2026 through dividends and share buybacks.

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