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Barclays PLC on Tuesday that its US arm will acquire direct-to-consumer loan origination platform Best Egg Inc for around $800 million. The consideration is based on $275 million in tangible net assets, and remains subject to change, Barclays noted. The London-based lender said it represents a price-to-earnings multiple in the high-single digits. Barclays expects the acquisition, including the realisation of synergies, to generate an attractive return on investment, which is comparable to its three highest-returning UK businesses over time. It is buying Wilmington, Delware-based Best Egg through its wholly-owned consumer banking subsidiary Barclays Bank Delaware, which operates as Barclays US Consumer Bank. Barclays expects the deal to be accretive to USCB’s return on tangible equity in 2027, supporting USCB’s post-2026 target of RoTE in the mid-teens. It is also anticipated to be accretive to overall group RoTE and earnings per share in 2027. Best Egg currently services around $11 billion in personal loans, according to the bank. It has facilitated loans originations worth around $40 billion since launching in 2013, and is targeting $7 billion in 2025. ‘The loans are funded through structures including securitisation programmes and forward flow arrangements provided by a range of alternative asset managers,’ Barclays explained, noting Best Egg’s ‘focus on prime borrowers and an established track record of risk management.’ The bank will keep Best Egg’s current revenue model, which sees the US firm earning ‘largely fee-based capital-light income’ for its services. Barclays will then retain ‘a small portion’ of new lending flow. The deal is expected to close in the second quarter of 2026, following the bank’s disposal of American Airlines co-brand credit card receivables. Barclays estimated the combined effect of the American Airlines sale and the Best Egg buy being a net six basis-point increase to the group’s CET1 ratio in the second quarter. The acquisition is expected to reduce CET1 capital by about 16 basis points on completion. Barclays Chief Executive CS Venkatakrishnan commented: ‘The deep and sophisticated US consumer finance market offers rich prospects for growth at Barclays. The transaction will strengthen our US Consumer Bank and offers an exciting opportunity to significantly bolster our capabilities in personal lending.’ Best Egg CEO Paul Ricci described the deal ‘as a testament to... the trust we’ve earned from our customers.’ Barclays shares were down 0.4% at 394.23 pence on Tuesday morning in London. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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