Barclays buys $3.8 billion Gap credit card portfolio in the US
Banks worldwide are trying to grow fee-earning businesses such as credit cards, amid rock-bottom central bank interest rates
Barclays said on Friday its United States arm will buy a $3.8 billion credit card portfolio from Synchrony Bank, as the British lender seeks to grow its U.S. profits and diversify further in to fee-earning businesses.
The co-branded credit card accounts and receivables were issued in partnership with clothing retailer The Gap Inc , and the deal is expected to close in the second quarter of next year.
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The deal comes at a time when banks worldwide are trying to grow fee-earning businesses such as credit cards, amid rock-bottom central bank interest rates that have squashed profits from their other main business of lending.
WALMART, GAP WILL DEBUT GAP-BRANDED HOME COLLECTION
The deal follows an agreement in April between Barclays and Gap under which they would issue co-branded credit cards to Gap customers in 2022.
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The acquisition, which Barclays said is being financed from its existing resources, is estimated to reduce the bank's core capital ratio by around 20 basis points.
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(Reporting by Lawrence White; editing by Jason Neely, Kirsten Donovan)