Published On: Wed, Apr 30th, 2014

Bad Bank Portfolio

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British bank Barclays Plc will next week announce the creation of a bad bank portfolio of assets it deems non-core that it intends to sell or run down as part of a streamlining of its investment bank, a person familiar with the matter said on Tuesday.

Last year, Barclays Chief Executive Antony Jenkins announced a portfolio of assets termed Exit Quadrant, that it aimed to get rid of; and these assets are likely to go in the non-core portfolio along with commodities assets following last week’s decision by the bank to exit that business, the Financial Times said.

The source said the details had not been finalized and asked not to be named before the plan is announced on May 8.

There are 54 billion pounds of assets in the Exit Quadrant portfolio.

The Financial Times, which first reported the plan to set up a so-called bad bank of assets, said it is also likely to house parts of Barclays’ macro products unit, which includes the trading of interest rate-linked products, currencies and commodities, and some or all of Barclays’ retail banking businesses in France, Italy, Spain and Portugal.

Barclays declined to comment.

Full details of assets to go in the non-core business will be released in a strategic update on May 8. The internal bad bank will be run by Eric Bommensath, the co-head of Barclay’s investment bank.

The news comes hours after one of the British bank’s top dealmakers quit as head of its Americas business, in another blow to Barclay’s investment banking arm. The former Lehman Brothers banker’s exit is likely to raise concern that some of his former Lehman colleagues will follow him out the door due to complaints about pay and the future plans for the business.

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Bad Bank Portfolio