Barclays has announced the sale of its Russian
retail and commercial operations to investors including one of
Russia’s leading bankers Igor Kim.

Under the terms of the sale, the purchasers
will have the right to continue to use the Barclays name in
connection with the acquired business for a transitional period of
up to nine months.

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Barclays had announced
plans of selling its Russian retail and commercial operations on 15
February.

Barclays CEO Bob Diamond admitted in
mid-February that the bank was unable to compete in the Russian
retail banking market, as it is dominated by state-owned domestic
lenders.

In 2008, Barclays paid $745m to acquire
32-branch-strong Expobank. Based in Western Russia, Expobank had
assets of $186m when it was taken over by Barclays.

Barclays is not the only Western lender
struggling in the Russian retail banking territory.
HSBC, that had entered the Russian market in 2009, sold its Russian
retail business in mid-June to Citi.

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On 20 June,
French bank BNP Paribas announced a joint venture agreement with
Sberbank to offer consumer loans in retail stores across Russia
and expect to grab a 30% share in the market within the next two to
three years.

Barclays Capital will continue to operate in
Russia through its existing broker dealer subsidiary. The lender’s
private wealth management division, Barclays Wealth, will continue
to offer offshore wealth management services to individuals in
Russia.

Barclays Bank in Russia had gross assets of
£513m as of 30 September. The transaction is not, reportedly,
expected to have a material impact on Barclays earnings per share
or capital ratios.