Shares of Barclays (BCS - Free Report) were down nearly 2.3% in late-afternoon trading Monday after the company’s sale of its wealth and investment management business in Singapore and Hong Kong failed to raise as much cash as was expected.
The British banking giant offloaded these operations for about $225 million to Singapore’s Oversea-Chinese Banking Corp. (OCBC). When the deal was originally announced in April, Barclays indicated that it was expecting to fetch around $320 million from the sale.
Barclays’ Singapore and Hong Kong business currently has about $18.3 billion worth of assets under management, and it was valued as high as $500 million at one point. The deal was fixed at 1.75% of assets under management, and when some clients decided to stick with Barclays or move to other banks, the overall value of the sale was reduced.
Despite this sales, Barclays claims that it is still committed to Asia. The bank maintains offices in Singapore, Hong Kong, China, India, and Japan, although it did cut jobs and exit several smaller markets in the continent.
In a post on the company’s website, Barclays CEO Jes Staley applauded the sale and asserted its importance for the bank’s continuing goal to trim its non-core businesses.
“This is another example of the great progress we have made this year in Barclays Non-Core, as we aim to reduce risk weighted assets to £23 billion in 2017 and reintegrate the remainder of the unit back into the Group,” Staley said.
Barclays said that the sale will result in a nearly $1 billion pro forma decrease in risk weighted assets.
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