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February 8, 2008

Barclays acquires Goldfish

by Gill Montia

Story link: Barclays acquires Goldfish

Barclays is acquiring the Goldfish credit card brand from Discover Financial Services of the US.

The bank is paying £35 million for Goldfish which has 1.7 million UK credit card clients with outstanding balances totalling £2 billion.

The acquisition should be completed this summer and Barclays plans to integrate Goldfish into Barclaycard, which has 9.6 million UK cardholders and 17 million worldwide.

It has not yet been decided whether the Goldfish brand will be retained.

Discover, which is a leading card issuer in the US, is making a loss on the sale and will be taking a one-off post-tax first-quarter charge of up to £108 million as a result.

The sale can be interpreted as evidence of unease over the profitability of the UK credit market; it follows Egg’s decision last week to withdraw further credit from 161,000 customers.

Egg is owned by US bank, Citigroup, which having written down substantial losses in the US sub-prime mortgage crisis is now seen as keen to offload unprofitable British borrowers.

Latest figures from Apacs, the payments services association, show that credit card spending over Christmas was 4% up on the 2006 festive period, at £32.2 billion. The increase represents the slowest year-on-year growth for four years.

 

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