Barclays is to buy US personal loan firm Best Egg for £600million in what has been described as a ‘landmark’ move.
The deal gives the bank access to a ‘deep and sophisticated market’ offering ‘rich prospects for growth’, said boss C. S. Venkatakrishnan, known as Venkat.
It is also significant because it reverses a trend after the financial crisis in which UK lenders drastically reduced their exposure to the US.
Best Egg has facilitated more than £30billion in personal loans since it was founded in 2013, Barclays said. It is expected to arrange more than £5billion this year alone via its platform. The loans are funded by being packaged up and sold to investors
Barclays already has a significant presence in the US. The Best Egg deal is expected to complete in the second quarter of next year.
Venkat said: ‘The transaction will strengthen our US Consumer Bank and offers an exciting opportunity to significantly bolster our capabilities in personal lending.’
US deal: Barclays is to buy US personal loan firm Best Egg for £600m in a deal reversing a trend after the financial crisis in which UK lenders drastically reduced their exposure to the US
John Cronin, analyst at Seapoint Insights, said: ‘Barclays’ acquisition of Best Egg is a landmark deal as it’s the first time one of the UK’s Big Six lenders has moved to acquire a major US lending institution since the financial crisis.’
The announcement comes a day after Barclays revealed a separate move to restart investment banking in Saudi Arabia after pulling out 11 years ago.
Last week, the bank reported a 7 per cent drop in third quarter profits to £2.1billion as it counted the cost of major corporate loans going sour and set aside more money for the UK’s car loan mis-selling scandal.
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