Barclays bids adios to Spanish retail banking

So, Barclays has sold its loss-making Spanish retail banking business to CaixaBank for €800 million (£632 million) in cash. It's hardly surprising given the operation appeared in the UK lender's non-core division at a strategy update in May.

Yes, the price was a little light of expectations at 0.5 times book value, and it means Barclays loses £0.5 billion on the deal. But it is, at least, progress and action which the market should welcome.

The deal, which will complete probably at the December year-end or shortly after, involves total assets of €22.2 billion and liabilities of €20.5 billion. It will reduce risk-weighted assets by £8 billion, driving a 12 basis-point increase in the Capital Requirements Directive (CRD IV) Common Equity Tier 1 (CET1) ratio - this was 9.9% in June - and 2 basis-point gain in the leverage ratio.

Deutsche Bank reckons that should lift consensus earnings per share (EPS) forecasts for 2015 by a few percent. The broker currently pencils in adjusted EPS of 25p, up from an estimated 21.9p in 2014. The CaixaBank deal also trims tangible net asset value (TNAV) by about 4p a share from 279p in June.

At 224p, Barclays trades on 0.8 times tangible book value (TBV) and just under 9 times earnings forecasts for 2015 versus a European sector average of 11.2. Clearly, the "grind" higher we talked about in July is proving to be just that, but only a day after the £119 million sale of its UAE Retail Banking business, Barclays is proving it is not all talk, but can walk the walk, too.