Barclays has made a loss of £500m on the sale of its Spanish banking division as it follows plans to shed unprofitable businesses.
The British bank has sold its retail banking, wealth, investment management and corporate banking business in Spain to Caixa Bank for €800m (£632m).
Caixa Bank, Spain's third-largest lender, will take on 262 branches, 2,400 employees and 550,000 customers once the deal is completed this year. Barclays, however, will keep its investment banking operations and credit card business in Spain.
The sale is part of the turnaround strategy of chief executive Antony Jenkins, who wants to restore profitability by selling off some of its struggling European divisions and cutting costs.
"We were clear that this business, while not central to Barclays' strategy, could be attractive to another owner and today's announcement reflects that perspective," Jenkins said. "We remain on track to rebalance Barclays as part of our strategy to deliver sustainable returns for our shareholders."
Barclays confirmed it had also sold its UAE retail banking business to Abu Dhabi Islamic Bank. On this deal, Barclays is making a pre-tax gain of £119m on the sale of a portfolio of mortgages, unsecured credit and deposits.
Barclays will make a loss of £500m on the Caixa deal; £400m will be booked in the third quarter of 2014 and £100m in the final quarter.
Barclays expanded rapidly into Spain in the early part of the last decade, buying Banco Zaragozano for €1.1bn in 2003. The banks operated under a Barclays brand name but ran into problems when the Spanish housing market collapsed, prompting the deep recession.
According to Reuters, Barclays shut or sold 161 branches in Spain last year and cut around a third of its workforce in the country.
In May, Barclays announced it was cutting 19,000 jobs worldwide, including a dramatic reduction in its investment banking arm, to focus on areas where it had a competitive advantage.