British banking major Barclays has agreed to sell its wealth and investment management businesses in Portugal to Spain’s Bankinter.

The deal also includes the sale of retail banking, insurance management units, and part of the corporate banking business in Portugal.

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In addition, the bank has also agreed to sell its insurance unit to Bankinter’s subsidiary Bankinter Vida, which runs an insurance joint venture with Mapfre.

However, the bank will continue to retain some activities in Portugal, including its Barclaycard, investment banking and large corporate operations.

Barclays expects the sale to reduce its risk-weighted assets by about £1.7bn and trigger a post-tax loss of about £200m, part of which will be booked in third quarter of 2015.

The transaction, which subject to regulatory approval, is slated to close in the first quarter of 2016.

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The sale of the Portuguese assets forms part of Barclays chairman John McFarlane’s turnaround plan to divest assets in order to reduce costs.

"I am pleased to be announcing further reductions in Barclays Non-Core through the transactions announced today. We remain on track to rebalance Barclays as part of our strategy to deliver sustainable returns for our shareholders," McFarlane said.