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.

Ticker Security Last Change Change %
GPS GAP, INC. 23.82 -0.53 -2.18%

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)