Barclays PLC's (LSE:BARC) announced an $800 million deal in America that analysts said showed a reassertion of the UK bank's stateside intent.
The lender's Delaware-based subsidiary is buying Best Egg, a US personal loan originator with a focus on prime borrowers.
Barclays said it generates "fee-based capital-light income" and
This year, Best Egg is expected to facilitate more than $7 billion in personal loan originations via its direct-to-consumer platform, with loans funded through structures provided by a range of alternative asset managers, with the FTSE 100 lender planning to continue this model and retain a small portion of Best Egg’s new lending flow on its balance sheet.
Analysts at UBS said they believe it sends a clear message that Barclays management wants to grow the US consumer franchise rather than shrink it, as a long-running American Airlines co-branded credit card partnership ends next year
UBS, which rates the shares a 'buy' with a 12-month price target of 455p (about 15% upside), says the acquisition should offset lost income from the American Airlines deal winding down.
Rather than tying up capital on the balance sheet, Best Egg manages a loan book of $11 billion funded through securitisations and forward-flow agreements, an approach UBS notes fits neatly with Barclays’ existing model and its sensitivity to capital constraints.
At 16 basis points of CET1 invested, the deal is modest in size but strategically useful.
It broadens the personal-loan offering available to Barclays’ roughly 20 US card partners, adding scale and product diversification just as the group looks to replace profit contribution from the American Airlines contract.
UBS points out that the transaction values Best Egg on a high single-digit price-to-earnings multiple and should be accretive to returns on tangible equity in the US consumer business by 2027, with profitability expected to match Barclays’ top-performing UK divisions over time.
Trading on roughly seven times forecast 2026 earnings and one times tangible book value, the broker continues to view Barclays as one of its top picks among European banks.
The Best Egg purchase, it says, shows the lender is intent on building rather than retreating from its American ambitions.