Barclays hatches plan to buy Egg's UK credit cards

Barclays Bank is buying the British credit card assets of the online lender Egg from Citigroup to boost its retail banking business. The deal, agreed for an undisclosed sum, will give Barclays 1.15 million credit card accounts with about £2.3bn of outstanding balances.

The British bank will integrate the Egg accounts into its Barclaycard credit card business after the deal, which is expected to be completed in the first six months of this year.

Egg's credit card accounts are the biggest part of its business. The formerly cutting-edge brand will stay with Citigroup after taking a severe beating in recent years.

Citi bought Egg from its founder, the insurer Prudential, for £575m in 2007 – just before the financial crisis – in what proved to be a badly-timed push into UK consumer lending.

The business went through various bosses and caused uproar when it cancelled 161,000 accounts without notice in 2008. Many rejected customers claimed that they had spotless credit records.

Egg racked up big losses for Citi and was an extra headache for the US banking giant as it battled to avoid collapse during the credit crunch.

Egg's recent miserable history is a far cry from its launch in 1998 as the UK's first internet bank. Its quirky name and marketing gave it a high profile but after a botched move into France, the Pru tried unsuccessfully to sell its stake and the company began a long decline.

Chris Lucas, the finance director at Barclays, said yesterday: "The acquisition of Egg's UK credit card accounts has been priced at a significant discount to gross receivables. Based on current projections, we expect the transaction to exceed the financial return targets set out at our recent results announcement."

Last month, Barclays said it was aiming for a return on equity of 13 per cent. Britain's biggest credit card lender has snapped up other card businesses in the wake of the financial crisis, including Goldfish from the US lender Discover. Citigroup put Egg on the block two years ago as part of its disposal plans after it was bailed out by the US government. Egg is left with savings and insurance businesses which remain for sale.

Citi said the deal was expected to result in an after-tax gain, which would not be material to its net income.

Start as you mean ... new lloyds chief speeds up disposals

The new boss of Lloyds Banking Group is speeding up the bank's asset-disposal plan including the sale of 600 UK retail branches under orders from the European Commission.

Antonio Horta-Osorio announced a strategic review on his first day as chief executive at Britain's biggest retail bank after joining from rival high-street lender Santander.

All branch closures have been put on hold until the end of the year. The bank intends to announce the results of the strategic review in the summer.

Mr Horta-Osorio said: "As the integration of our business comes to a close in the coming months we have a unique opportunity to redefine our future and demonstrate how we will drive long-term value for our customers, shareholders and employees."

The Portuguese banker arrived with a reputation as a formidable operator and dealmaker but his record on customer service at Santander was less glowing.

Lloyds has slashed thousands of jobs after agreeing to rescue HBOS in a government-backed deal in 2008.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Tax Manager / Accountant

£35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...

Ashdown Group: Contracts Executive - City of London

£35000 - £37000 per annum + benefits: Ashdown Group: Contracts Executive - Cit...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...

Recruitment Genius: Call Centre Debt Collector - Multiple Roles

£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Day In a Page

Giants Club: After wholesale butchery of Idi Amin's regime, Uganda’s giants flourish once again

Uganda's giants are flourishing once again

After the wholesale butchery of Idi Amin's regime, elephant populations are finally recovering
The London: After 350 years, the riddle of Britain's exploding fleet is finally solved

After 350 years, the riddle of Britain's exploding fleet is finally solved

Archaeologists will recover a crucial item from the wreck of the London which could help shed more light on what happened in the vessel's final seconds
Airbus has patented a jet that could fly from London to New York in one hour

Airbus has patented a jet that could fly from London to New York in one hour

The invention involves turbojets and ramjets - a type of jet engine - and a rocket motor
10 best sun creams for kids

10 best sun creams for kids

Protect delicate and sensitive skin with products specially formulated for little ones
Tate Sensorium: New exhibition at Tate Britain invites art lovers to taste, smell and hear art

Tate Sensorium

New exhibition at Tate Britain invites art lovers to taste, smell and hear art
Ashes 2015: Nice guy Steven Finn is making up for lost time – and quickly

Nice guy Finn is making up for lost time – and quickly

He was man-of-the-match in the third Test following his recall to the England side
Ashes 2015: Remember Ashton Agar? The No 11 that nearly toppled England

Remember Ashton Agar?

The No 11 that nearly toppled England
Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks