In a deal expected to be finalized in mid-2022, British banking giant Barclays has purchased the Gap-branded credit card portfolio from Synchrony Bank for $3.8 billion. Barclays reports that the acquisition is fully funded from existing resources, and has agreed to issue credit lines through the Gap name as early as next year.
Gap is hardly the first major U.S. brand with which Barclays has partnered. Over the last few years, Barclays has struck similar agreements with travel and leisure brands such as American Airlines and Wyndham Hotels, representing a continuing expansion of its position in the United States.
Market analysts have hailed this strategy as a savvy move from Barclays, which lacks the brand recognition and value of some of its U.S. competitors. In lieu of pushing its own branded credit card lines, as the bank has tried previously with limited success, Barclays is looking to enjoy greater returns by partnering with already-established retail and travel brands.
This maneuver is seen as increasingly necessary by traditional banks, which have recently been feeling the lending pinch from low central bank-backed interest rates. Whether this proves a viable path forward for old-school financial institutions to expand into crowded playing fields remains to be seen.