UPDATE: Barclays To Buy Citi's Credit Card Operations In Portugal
September 29 2009 - 8:17AM
Dow Jones News
Barclays PLC (BCS) said Tuesday that it will buy Citigroup
Inc.'s (C) credit card business in Portugal, as it continues to
push for expansion outside the U.K.
Barclays is acquiring about 400,000 credit card accounts with
gross assets of about EUR644 million, it said.
The bank didn't disclose how much it is paying for the business,
but the Wall Street Journal, citing people familiar with the
matter, has reported the amount to be less than $100 million.
Barclays currently has more than 130 branches in Portugal, and
Frits Seegers, chief executive of Barclays Global Retail and
Commercial Banking, said the acquisition will put the bank among
the five top credit card players in the country.
"With this acquisition, we will deliver a real step change in
our business, significantly increasing Barclays Portugal's customer
base and providing extensive cross-sell opportunities," Seegers
said.
The bank intends to rebrand existing Citi cards with its global
Barclaycard brand "over time."
Earlier Tuesday, Barclays Chief Executive John Varley told a
London conference that the goal for the bank's global retail and
commercial banking business is to have half of its profit generated
from international operations.
In the first half of 2009, businesses outside the U.K. accounted
for 18% of the operation's profits.
Barclays has said it will push to expand its business
organically and through acquisitions in a time that competitors,
particularly those that received government money such as
Citigroup, are scaling back.
Earlier Tuesday, U.K. newspaper The Times reported that Barclays
was eyeing the banking division of U.K. insurer Standard Life
(SL.LN), which could be worth GBP200 million to GBP300 million.
"We are looking at acquisitions in Western Europe," a bank
spokesman said. He declined to comment on Standard Life
specifically.
Meanwhile, Citigroup, which has been hard hit by the global
financial crisis and is now 34%-owned by the U.S. government, is
pulling back its presence in the U.S. and abroad.
In a recent presentation, CEO Vikram Pandit classified the
bank's Western Europe retail banking and cards portfolios as
non-core assets.
"The transaction is in line with Citi's goal to reduce assets,
tightly manage risks and optimize the value of assets in Citi
Holdings, while working to generate long-term profitability and
growth from Citicorp, which comprises its core franchise,"
Citigroup said in a separate statement.
The sale won't have a material impact on Citigroup's net income,
it added.
Barclays' acquisition is subject to competition clearance by
Portuguese authorities and is expected to close before the end of
the year.
At 1144 GMT, Barclays shares were up 6 pence, or 1.6%, at 371
pence in a slightly lower overall market.
-By Patricia Kowsmann, Dow Jones Newswires. Tel
+44(0)207-842-9295, patricia.kowsmann@dowjones.com