GS), which sold its remaining stake in China's largest lender, Industrial & Commercial Bank of China, for around $1.1 billion in May. Both UBS ( UBS) and Royal Bank of Scotland ( RBS) have also sold stakes in Chinese banks as new regulations make it more punitive to hold minority stakes in other financial institutions from a capital perspective. Barclays is selling its holding in the UAE retail arm as the combination of new capital requirements under Basel III and stiff competition from large local incumbents make it difficult for foreign banks to eke out sufficient return. "Following a strategic review, Barclays has decided to refocus its efforts in the UAE on its key strengths in Corporate and Investment Banking and Wealth & Investment Management," the bank said Tuesday, reaffirming its commitment to the region where it will retain two branches. The move is part of a review of Barclays' global business under chief executive Antony Jenkins where return on equity has been scrutinized across its various businesses. Other major banks to shed their consumer portfolios include Citigroup Inc., which has been selling its credit card businesses around the world and sold the remaining 35% stake in its wealth management business for $4.7 billion to Morgan Stanley in June.
Banks deemed systemically important financial institutions, or SIFIs, are reassessing their business models to meet tough new capital requirements. These rules include a leverage ratio, which dictates that bank holding companies must have capital equal to 5% of their assets, while their federally insured banking units must hold capital equal to 6% of assets. U.S. banks in this situation include Citi ( C), BofA, Goldman, JPMorgan Chase ( JPM), Morgan Stanley ( MS), Wells Fargo ( WFC) and State Street ( STT). Since the financial crisis, large banks have been required to hold a higher quantity and quality of capital, prompting them to exit several business lines. In November, the Basel Committee on Banking Supervision will release information on the calculation of its capital surcharge for SIFIs, giving greater transparency on the risk and return of large banks' businesses. Dealmakers expect the move to bring pressure from investors to divest further parts of banks operations that fail to generate sufficient return for the capital charges they invoke. -- Written by Jane Searle in New York