Barclays’ US division will buy a $3.8bn credit card portfolio in a co-branding deal with retailer Gap, in a bid to up its market share in the US.
Four months after initially reaching an agreement with the clothing giant to partner and create co-branded credit cards for Gap customers, the bank has announced it will buy the portfolio from Synchrony Bank.
The deal, which is expected to close in the second quarter of next year, follows a string of co-branding partnerships that Barclays has formed in recent years.
Its previous deals with JetBlue, American Airlines and Wyndham hotels were also aimed at boosting its market share in the US entertainment and leisure space, to fend off competition from rivals such as Citibank and JPMorgan.
While central bank interest rates cruise around zero and hamper profit, banks have been zooming in on fee-earning products such as credit cards in order to boost returns.
Barclays will finance the Gap acquisition from existing resources, and the bank’s core capital ratio is expected to reduce by around 20 basis points after the deal.
In the second quarter of 2021, Barclays’s pre-tax profits jumped 52 per cent to £1.6bn, beating estimates of £1.2bn.