Friday, March 11, 2011

Barclays Announce Closure of 100 Spanish Branches

Bad news or not? Obviously for the employees of course. However High streets in Spain are clogged by useless bank branches and the story within the story here is that the chief executive actually states that he sees Spain as a huge growth possibility for the group. Your thoughts?

Barclays Announce Closure of 100 Spanish Branches

Barclays is poised to cut its Spanish retail banking network by a fifth in the first concrete sign of the rationalisation of the group’s operations announced last month by Bob Diamond, its new chief executive.

According to people briefed on the exercise, the project is being driven by Jaime Echegoyen, the new head of Barclays Spain, poached last month from local rival Bankinter , where he was chief executive.

The plan, which is said to be well advanced, would see Barclays close more than 100 of its 600 branches. The bank’s Spanish operations represent one of its biggest networks outside the UK.

Mr Diamond said last month, when announcing Barclays’ annual results, that a third of the group was not pulling its weight, and would be restructured.

The biggest problem areas are the retail and corporate businesses in western Europe. Corporate loan impairments in Spain more than trebled to £900m last year, due largely to soured lending to property developers in the troubled real estate market.

But the news on the Spanish restructuring is still somewhat surprising, given Mr Diamond’s suggestion that Spain could be an attractive growth market.

It was “not a time to exit Spain”, he said, adding that the bank could pursue consolidation opportunities there, perhaps by buying up some of the distressed regional savings banks, known as cajas.

A Barclays insider said: “This doesn’t change the fact that we are committed to Spain and we have a strong franchise there.”

Among Mr Diamond’s other restructuring priorities is a drive to make more of the bank’s presence in Africa. He embarked recently on a two-week tour of the continent.

Story from Financial Times

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