The British bank’s purchase of fintech Best Egg signals a deeper push into U.S. consumer lending as part of its broader plan to bolster returns.
C.S. Venkat akrishnan has pledged to return at least $12.7 billion to shareholders and achieve a return on tangible equity in excess of 12%. Photographer: Bess Adler/Bloombergfor $800 million in a deal that gives the bank a ready-made digital platform for personal loans and a pipeline of assets it can package and sell to investors “The deep and sophisticated U.
S. consumer finance market offers rich prospects for growth at Barclays,” said Barclays CEO C.S. Venkatakrishnan, known to colleagues as Venkat. “The transaction will strengthen our US Consumer Bank and offers an exciting opportunity to significantly bolster our capabilities in personal lending.” The deal is expected to close in the second quarter of next year, after Barclays completes the sale of receivables from its co-branded American Airlines credit cards. Last year, Citigroup agreed to buy those receivables after American Airlines decided to make the U.S. bank the exclusive issuer of its credit cards. Best Egg offers personal loans to customers through its online platform and sells the loans it makes to investors after converting them to asset-backed securities. Since launching in 2013, the Delaware-based fintech has facilitated more than $40 billion of personal loans for two million customers and currently services about $11 billion in loans. The fintech’s leadership has included a number of Barclays veterans. Best Egg’s current CEO, Paul Ricci, initially joined the company in February 2014. His LinkedIn profile shows that he previously worked at Barclays and Barclaycard US. Ricci was promoted to chief executive in June 2023 after Best Egg’s founder and CEO, Jeffrey Meiler, resigned.Meiler founded the business in 2013, and formally launched the platform the following year. Before Best Egg, he cofounded Independence Energy, a retail energy supplier that was later acquired by NRG Energy. Meiler has described Best Egg as being on "a mission to find better ways to make money accessible to allow people to enjoy life." It was among a new generation of self-described fintech firms that emerged after the financial crisis, promising to disrupt the banking industry by leveraging new technologies to offer cheaper, more convenient services.it had closed a Series E funding round led by the Healthcare of Ontario Pension Plan with participation from investment funds managed by Davidson Kempner Capital Management. Barclays is one of Britain’s top retail banks, and one of the last major European players on Wall Street. Last year, the bank said it would shift its priorities to focus more on consumer and business lending operations, while reducing the amount of risk-weighted assets allocated to its more volatile investment bank. It was part of a broad strategic plan unveiled by Venkat that pledges to return at least £10 billion to shareholders and achieve a return on tangible equity in excess of 12%. Last week, Barclays reported pre-tax profits of £2.1 billion for the three months to the end of September, down from £2.2 billion a year earlier. The London-listed bank also disclosed a £110 million loss from its exposure to the U.S. subprime auto lender Tricolor Holdings.
Wall Street Investment Banking Venkat HOOPP Davidson Kempner Tricolor Holdings
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