Matthew Barrett, the new chief executive of Barclays Bank, made his first significant restructuring move yesterday, selling the bank's vehicle fleet leasing arm Dial to the Dutch bank ABN Amro for £269m.
Mr Barrett said earlier this year he would be merciless in culling poor performers from Britain's fourth-largest bank. He said the bank would also exit areas where it was not big enough to be successful.
He is widely seen as positioning Barclays for major acquisitions and would be expected to put the proceeds from the Dial sale into that takeover war chest.
ABN Amro's vehicle-leasing unit, Lease Plan, is already the market leader in Europe. The deal increases the size of its fleet by a sixth to over 700,000 and its total income to over 600m euros (£357m). Dial is Europe's fifth-biggest vehicle leaser and at 31 December had more than 115,000 vehicles under management.
ABN Amro has guaranteed it would not change employment conditions of Dial's 620 staff for the six months, said Barclays. Dial has about 250 staff in Britain, with the rest in France, Spain and Italy. Dial posted pre-tax profits of £22m in 1999 and had net assets of £64m at the year-end. This means ABN Amro paid a multiple of about 12.3 times pre-tax earnings.
Dial has a market share of about 3 per cent, but Barclays decided this was not enough to survive in a rapidly consolidating market without further major investment.
"Dial is an excellently run and well-known business, but it does not fit with our core activities," said Barclays Corporate Banking chief executive Chris Lendrum. Barclays shares closed up 42p at 1,679.Reuse content