UK banking giant Barclays' proposed sale of its French retail banking business has been quickly followed up an upgrade of its debt rating by Moody's.
Following the close of markets on Tuesday (12 December), Moody's said it had upgraded Barclays' long-term issuer and senior unsecured debt ratings to Baa2 from Baa3, and the long-term deposit and senior unsecured debt ratings of the group's main operating company Barclays Bank to A1 from A2.
The upgrades were prompted by Moody's assessment that Barclays' senior unsecured and Barclays Bank's junior depositors and senior unsecured creditors face a "lower loss given failure as a result of Barclays' issuance of loss-absorbing capital that has occurred to date."
However, in Moody's view, "negative pressures continue to weigh on Barclays Bank's standalone credit profile, which are reflected in the continuing negative ratings outlook on both Barclays and Barclays Bank."
Overnight, Barclays revealed the sale of its French retail banking unit to private equity firm AnaCap Financial Partners. The terms and valuation of the deal – which includes 74 retail branches, life insurance, wealth management and brokerage operations – were not disclosed.
However, Barclays said the deal does not include its French corporate and investment banking operations. Group chief executive Jes Staley said that the French retail banking business was "no longer central" to the bank's core strategy.
"This is another positive step in reducing our non-core unit, creating a more focused, simpler Barclays, and thereby releasing the strong performance of our core business. The agreement to sell our French business completes Barclays' exit from retail banking in continental Europe," he added.