Barclays PLC (LSE:BARC) has a problem in its US credit cards following the ending of its decade-long partnership with American Airlines.
The US carrier announced yesterday that Citi will be its new exclusive co-branded credit card partner via a ten-year partnership.
Citi added that industry data indicates American Airlines accounts for around 22% of Barclays' US credit card receivables.
On a rough calculation, Citi added this loss might amount to a 1% drag on group earnings and affect its ability to hit US consumer targets, which the bank says were already the most unrealistic of all the divisional targets.
Barclays will also be at a competitive disadvantage for other co-brand deals due to an increase in risk density “and we struggle to see where this business fits in the context”, said Citi.
Shares in Barclays rose 0.2% to 268p.