Barclays Bank has written £50m off the value of its Parisian headquarters building, leaving the property worth just a third of its 1990 value. However, the deepening losses on its troubled French property operations failed to take the shine off the bank’s £1bn half-year profits this week, writes Karen Lennox.
Last year the bank made an exceptional provision of £70m against the same property in rue Lafitte, between Boulevard Hausmann and rue La Fayette in the financial 9th arrondissement.
Barclays moved into the 25,000m2 (269,107 sq ft) property in 1990 after acquiring the L’Europeenne de Banque subsidiary of Credit Commerciale de France which owned the property. The write-downs in two successive years mean that it is worth just a third of the FFr1.5bn “at cost” figure at which it appears in the balance sheet.
The bank had only a little more luck with its former HQ at 33 rue du Quatre Septembre, which it left in 1990 to move into the rue Lafitte property: the building, acquired in 1918, was sold to French insurer UAP in 1993 for £39m – estimated to be just 40% of the price that it would have achieved at the peak of the market, two years before.
Barclays is continuing to slim down its French operations. Including the write-down on the operational property, bad debt provisions and costs of restructuring, these plunged £203m into the red in the six months to March.
The bank is also dismantling its regional office network and gearing down its property lending business in France. It has also decided to cut its losses and sell the £200m (FFr1.5bn) commercial property book built up during the 1980s, largely through syndicated loans. Bankers Trust is believed to have been appointed to find a buyer for the portfolio, which ranges from central Parisian offices to residential properties in the south of France.
