updated - January 21, 2020 Tuesday EST
Barclays PLC has announced in a press release that it will be selling its Italian Retail Banking network of 89 branches to CheBanca!, the retail arm of the Mediobanca Group.
The transaction is part of Barclays' strategy to reduce businesses that are unprofitable or lack scale.
Reuters said that Barclays has said last year that it will sell most of its continental European retail banking operations.
The bank has already sold its retail banking operations in Spain and Portugal and is seeking to sell in France.
Reuters adds that Barclays will be refinancing its Italian business with €237 million before it passes it on to CheBanca!
The Italian business is estimated to have been loss-making.
Jes Staley, the CEO of Barclays Group, said in the press release that the transaction shows "further evidence of the reshaping" of the company to focus on its core business.
"We continue to make progress in the reduction of Barclays Non-Core as we target risk-weighted assets of around £20bn at the end of 2017," he said.
Barclays said that it will continue to operate its investment banking and corporate banking in Italy.
The bank will also continue to manage the remaining retail mortgage portfolio.
Barclays said in the press release that the transaction is estimated to result in pro forma decrease in risk-weighted assets of approximately £800 million on completion.
The company is also expecting a loss after tax of approximately £200 million, which will be booked in the fourth-quarter of 2015.
Barclays adds in the press release that once the transaction is completed, its total impact is expected to result in a small decrease in the company's CET1 ratio and tangible net asset value.
The bank is expecting the transaction to be completed on the second quarter of 2016, subject to regulatory approvals.
TOP 10 FRANCHISES OF 2020