Barclays (BARC.L) said on Friday that its United States arm will buy a $3.8 billion credit card portfolio co-branded with clothing retailer The Gap Inc (GPS.N), as the British bank continues a strategy of partnering with big brands to grow in the United States.
Barclays is buying the portfolio from Synchrony Bank, and the deal is expected to close in the second quarter of next year.
The deal comes at a time when banks worldwide are trying to expand fee-earning businesses such as credit cards, amid rock-bottom central bank interest rates that have squashed profits from their other main business of lending.
The deal follows an agreement in April between Barclays and Gap under which they would issue co-branded credit cards to Gap customers in 2022.
Barclays has in recent years partnered with brands including American Airlines, JetBlue, and Wyndham Hotels.
The co-branding deals are a way for Barclays to gain customers in a market where its own branding lacks the reach of incumbent rivals such as JPMorgan (JPM.N) and Citibank (C.N).
The lender has moved in recent years from trying to push credit cards through its own brand, to partnering with more established names in industries such as travel and leisure.
The Gap acquisition, which Barclays said is being financed from its existing resources, is estimated to reduce the bank’s core capital ratio by around 20 basis points.