Barclays to Sell $1.1 Billion US Credit Card Debt to Blackstone

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Barclays has entered into an agreement to offload approximately $1.1 billion of credit card debt in the United States to Blackstone, a move intended to enhance lending capabilities and mitigate balance sheet risks, the British bank announced.
This transaction aligns with Barclays’ recent strategic shift towards prioritizing consumer lending growth and aims to reduce the bank’s risk-weighted assets by approximately £1 billion. The global trend among banks toward utilizing credit risk transfers to divest risk from loan portfolios has been noted by Reuters, with investors assuming a portion of potential losses.
Blackstone’s investment in the credit card debt stems from insurance accounts managed by its asset-based finance group. Under the terms of the agreement, Barclays will continue to service the accounts in exchange for a fee. Notably, Barclays’ investment bank facilitated the transaction by advising Blackstone.
Anna Cross, Barclays Finance Director, underscored the significance of leveraging strategic partnerships to execute risk transfer agreements aimed at curtailing capital requirements. Cross expressed delight in announcing the first agreement concerning Barclays’ U.S. cards book during the Investor Update.
The move reflects Barclays’ commitment to optimizing its financial operations and strategic positioning in the dynamic landscape of consumer lending and risk management.