Barclays bank is to divest itself of its French retail banking arm amid allegations of money laundering and fraud.

The proposed sale to private equity firm AnaCap Financial Partners Ltd is for an undisclosed sum, but the sale will exclude the corporate and investment activities of the bank, which Barclays will continue to operate in France.

The retail business has a network of 74 branches across France employing around 1,000 staff, whose services include current accounts, deposits and mortgages, life insurance and wealth management.

The sale by the bank will probably not come as a surprise to many current or former expatriate Barclays customers, as over the past couple of years the bank has been tightening the requirements to hold an account with them, including raising the minimum deposit level.

Many customers whose business was deemed to be unprofitable to the bank have been obliged to close their account.

It is all part of a plan by the bank to divest itself of a range of retail banking operations and other none-core interests around the globe.

In future, the bank will focus on Barclays Bank UK and Barclays Corporate and International.

AnaCap, the prospective new owner of the retail operations, already has a banking platform, which includes Aldermore in the UK, MeDirect in Belgium, Mediterranean Bank in Malta, Equa bank in Czech Republic and FM Bank in Poland.

However, whether they will hold on to the branch network in France, try to grow it, or try to sell on to an existing bank in France remains unclear. The French bank network is already quite dense, so there are unlikely to be too many interested parties to take it over.

In commenting on the proposed acquisition, Nassim Cherchali, Director of AnaCap, stated: “This is an opportunity to acquire an attractive and established banking operation built on a team of highly talented individuals with exceptional relationships with customers across France."

"We have already established an unrivalled track record within the private equity industry for acquiring and growing banking platforms across the continent and, if concluded, we look forward to building this business further in a market with significant potential for innovation and expansion,"

When news of the sale broke a senior French executive of Barclays France broke cover with allegations of money laundering and mis-selling by the bank.

Philippe Hébert, chief risk officer of Barclays France, released a copy of a letter he had sent to Tony Blanco, Chief Executive of Barclays France, citing several cases of suspicious activity he claimed the bank had failed to take seriously.

Amongst the allegations was “African money laundering on a grand scale” at its Champs Elysées branch involving government officials, as well as “internal fraud”.

He also stated some elderly customers of France had regularly been mis-sold expensive products, with the example of a 97-year-old who was advised to put all his money into one of its life insurance products charging a 6% annual fee. The bank paid €60,000 to settle a complaint by the client’s son.