Barclays Life Insurance Portfolio Sold To Swiss RE
In an effort to add buoyancy to their balance sheet, Barclays Bank sells their life insurance portfolio to Swiss RE, the world’s biggest reinsurer for a cool £753 million. Although Swiss RE has suffered from recent writedowns, they have decided to go ahead with the purchase.
In this day of asset shuffling, Barclays should see a boost in profits from the sale to the tune of around £330 million. This move is expected to help Barclays balance sheets improve by only a small amount and right before first-half profits are to be announced. Experts are predicting quite a drop in pre-tax profits for Barclays with some anticipating a fall to £2.6 billion.
Later today, the Financial Times (FT.com) reveals Barlcays profits to have fallen by 1/3 to £2.75 billion, not far off analysts’ predictions. This comes as a disappointment especially since the bank was able to raise £4.5 billion in new capital from shareholders who already had to face the strain of falling share prices.
Despite these big losses, Barclays did raise their share of new mortgages in the UK and the Barclaycard credit card division revealed a 30% profit increase during the first-half of the year.
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