Barclays has inked a significant deal, selling approximately $1.1 billion of credit card debt in the United States to Blackstone. The strategic move is aligned with Barclays’ recently-announced agenda to prioritize consumer lending growth. This transaction is anticipated to release substantial capacity for Barclays, facilitating an expansion in lending activities while concurrently mitigating balance sheet risks.
The agreement reflects a global banking trend where institutions increasingly leverage credit risk transfers to divest risk from their loan portfolios. In this collaborative effort, Blackstone’s investment is channeled through insurance accounts managed by its asset-based finance group. While Barclays will continue servicing the accounts for a fee, the risk-weighted assets are expected to witness a reduction of around £1 billion, fostering a more robust and agile financial position.
Barclays’ investment bank played a pivotal role, acting as an advisor to Blackstone throughout this transformative transaction.
