REG - Barclays PLC - Disposal of Italian mortgage portfolio

BarclaysAnnouncement

24/04/2024 18:30

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RNS Number : 9161L  Barclays PLC  24 April 2024

 

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) million(1) 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
ratio(2).

 

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 ratio(2).

 

 

 

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
(http://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.

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