24 April
2024
Barclays
PLC
Disposal of Italian mortgage
portfolio
Barclays PLC ("Barclays") today
announces a transaction under which Barclays Bank Ireland PLC
("Barclays Europe") intends to dispose of its performing Italian
mortgage portfolio (the "Portfolio"). The transaction is expected
to be financed via a securitisation. Funds and accounts managed by
GoldenTree Asset Management LP ("GoldenTree") have entered into a
commitment letter under which they will purchase certain notes to
be issued by a newly incorporated entity, Miltonia Mortgage Finance
S.r.l. ("Miltonia"), to which the Portfolio is expected to be
transferred. Upon completion, the Barclays group will hold the most
senior class of notes to be issued by Miltonia in addition to the
percentage of notes it is required to retain to comply with its
regulatory risk retention obligations.
The transaction values the Portfolio
at approximately €3.3 billion: as a result of the proposed
securitisation, Barclays will receive cash proceeds of
approximately €400 million, including a small deferred
consideration element paid from cashflow generated from the
Portfolio, in addition to the most senior class of notes referred
to above. The consideration will be used for general corporate
purposes. Subject to satisfaction of certain conditions and
finalisation of the transaction documentation, settlement of the
consideration and completion of the sale is expected to occur
during Q2 2024.
Upon completion, the Portfolio will
continue to be serviced by Barclays Europe for a transitional
period. At the end of this period, it is intended that servicing of
the Portfolio will be transferred to a third-party long-term
servicer.
The gross asset value of the
Portfolio is expected to be approximately €3.5 billion at
completion, and the Portfolio generated a pre-tax loss of €(20)
million in the year to 31 December 2023.
As previously disclosed during the
Barclays investor update in February 2024, the transaction is in
line with Barclays' ambition to simplify Barclays and support its
focus on growing its key businesses. The transaction is not
expected to impact the planned financial distributions of
Barclays.
The transaction is expected to
generate a pre-tax loss of approximately €(260) million1
for the year to 31 December 2024, and release approximately
€0.9 billion of risk-weighted assets at
completion. The Portfolio represents the majority
of Barclays' overall Italian retail mortgage book and
the transaction is expected to be broadly neutral
to Barclays' CET1 ratio2.
Barclays will provide a further
update in due course, as appropriate.
In addition, Barclays is in
discussion with certain third parties in respect of the potential
disposal of the remaining non-performing and Swiss-Franc linked
Italian retail mortgage portfolios. Should such transactions occur,
they are together expected to generate a small pre-tax loss on
completion, but also be broadly neutral to Barclays' CET1
ratio2.
Notes:
1. The
incremental pre-tax loss of approximately €(260) million includes
directly attributable costs expected to be incurred and other
accounting impacts to be crystallised by the
transaction.
2. Based on
Barclays' CET1 ratio as at 31 December 2023.
- Ends
-
For further information, please
contact:
Investor
Relations
Media Relations
Marina
Shchukina
Tom Sullivan
+44 (0) 7385 142
673
+44 (0) 7796706678
About Barclays
Our vision is to be the UK-centred
leader in global finance. We are a diversified bank with
comprehensive UK consumer, corporate and wealth and private banking
franchises, a leading investment bank and a strong, specialist US
consumer bank. Through these five divisions, we are working
together for a better financial future for our customers, clients
and communities.
Forward-looking statements
This announcement contains
forward-looking statements within the meaning of Section 21E of the
US Securities Exchange Act of 1934, as amended, and Section 27A of
the US Securities Act of 1933, as amended, with respect to the
Barclays Group. Barclays cautions readers that no forward-looking
statement is a guarantee of future performance and that actual
results or other financial condition or performance measures could
differ materially from those contained in the forward-looking
statements. Forward-looking statements can be identified by the
fact that they do not relate only to historical or current facts.
Forward-looking statements sometimes use words such as 'may',
'will', 'seek', 'continue', 'aim', 'anticipate', 'target',
'projected', 'expect', 'estimate', 'intend', 'plan', 'goal',
'believe', 'achieve' or other words of similar meaning.
Forward-looking statements are based on the current beliefs and
expectations of Barclays' directors,
officers and employees and are subject to
significant risks and uncertainties. Actual outcomes may differ
materially from those expressed in the forward-looking statements.
Factors that could impact the Barclays Group's future financial
condition and performance are identified in the Barclays PLC's
filings with the US Securities and Exchange Commission ("SEC")
(including, without limitation, Barclays PLC's Annual Report on
Form 20-F for the fiscal year ended 31 December 2023, which is
available on the SEC's website at www.sec.gov). Subject to Barclays' obligations under the applicable laws
and regulations of any relevant jurisdiction (including, without
limitation, the UK and the US), in relation to disclosure and
ongoing information, Barclays undertakes no obligation to update
publicly or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.