Barclays to sell $1.1bn of US credit card debt to Blackstone

By Thomson Reuters Feb 27, 2024 | 7:21 AM

LONDON (Reuters) – Barclays has agreed to sell about $1.1 billion of credit card debt in the United States to Blackstone, in a deal the British bank said would free up capacity to expand lending and reduce balance sheet risk.

Barclays said the agreement reflected its recently-announced strategy to prioritise growing lending to consumers, and would reduce the bank’s risk weighted assets by around 1 billion pounds.

Banks globally have been making greater use of credit risk transfers to shed risk from loan portfolios, Reuters has reported, with investors sharing the risk of losses.

Blackstone’s investment has been made through insurance accounts managed by the company’s asset-based finance group. Barclays will continue to service the accounts for a fee.

Barclays’ investment bank acted as an advisor to Blackstone on the transaction.

“During our Investor Update, we said that we would leverage strategic partnerships to execute risk transfer agreements to reduce capital requirements. I am delighted to announce this first agreement in our U.S. cards book,” Barclays Finance Director Anna Cross said.

(Reporting by Eva Mathews in Bengaluru and Iain Withers in London; Editing by Shilpi Majumdar and Sinead Cruise)