Barclays buying $3.8 billion Gap card portfolio from Synchrony

Barclays is buying a $3.8 billion portfolio of Gap retail credit cards from Synchrony Financial, underlining the British bank’s ambitions to beef up its U.S. consumer business.

The deal, announced Friday, comes four months after the British banking giant had struck a deal with Gap to become the retailer’s credit card issuer starting in May 2022. Synchrony currently issues co-branded and private-label credit cards for Gap and its affiliates, but the two are parting ways after talks to renew their partnership faltered.

Barclays CEO Jes Staley has prioritized investing in the bank’s U.S. consumer business.


Gap’s other brands include Old Navy, Banana Republic and Athleta, and the total portfolio had about $3.8 billion in average receivables as of June 2021. Barclays says it expects to complete the portfolio acquisition in the second quarter of next year.

The agreement values the portfolio at roughly $3.9 billion, which amounts to a 2.5% premium for Synchrony, or about $100 million, according to a research note from Keefe, Bruyette & Woods analyst Sanjay Sakhrani. The terms of the deal were in line with expectations, Sakhrani wrote. The Wall Street Journal had reported in April that such a deal was in the works.

Synchrony has said it will redeploy the capital into share repurchases and investing in “higher growth programs.” Speaking on an April earnings call, CEO Brian Doubles said Barclays had been “a lot more aggressive” on the terms and price during negotiations with Gap.

The British bank is among the top 10 issuers of credit cards in the U.S., but, like most lenders, it has seen its credit card balances decline sharply during the pandemic. Barclays Bank Delaware, its U.S. subsidiary, reported roughly $19.7 billion in credit card loans at June 30, down about 9% from a year earlier.

Barclays’ U.S. card partners include the National Football League, American Airlines, AARP, JetBlue, Priceline and Wyndham Hotels & Resorts. Barclays is also rolling out new installment loan products that merchants can use to offer customers at the point of sale.

Barclays CEO Jes Staley has prioritized investing in the bank’s U.S. consumer business, telling analysts in July that he believes deeper relationships with big-name merchants could bolster its investment banking business here.

“Corporations definitely look at both their wholesale relationships and those that will provide something like a co-brand card, and therefore it fits very well within our portfolio,” Staley said.

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