Barclays Explores Available Options For Global Payments Activities

Barclays is in the process of studying the options available for its global payments activities. The move is part of a broader review being done by the financial institution into the method it has deployed to allocate resources.

Barclays explores options for global payments activities

Barclays is the third-largest bank in the UK. A report by Reuters said that in recent weeks, the bank has been tapping the services of consultants. These consultants will help the bank determine whether some of its payment businesses need to be expanded or combined with the businesses offered by other service providers through a merger or a joint venture.

Other banks located across Europe are also making plans to monetize payment assets. These banks have secured commercial partnership deals with specialist providers as they pay more attention to their strengths.

The review process is currently in the early stages, and depending on the outcome, the bank might not be forced to change its structure. The review process will include a look into different activities, such as issuing bank cards and the cards used by those offering payment services for merchants.

Barclays has already engaged the services of at least one of the leading consultancy firms. The bank might also hire other consultancy firms to delegate other assignments and speed up the entire process.

A spokesperson from Barclays has commented on the development, saying that the three businesses owned by the bank continued to perform well. The spokesperson has also said that it offered a robust business mix. Moreover, its global payments business was growing and becoming a priority for the bank.

Barclays payment business

The payment services offered by Barclays are available through its UK Barclaycard business and its Card and Payments (CC&P) division. The revenues of this business increased by 35% last year to 4.5 billion pounds amid larger US card balances. On the other hand, it reported a 19% decline in pre-tax profits because of high impairment charges.

UK Barclaycard reported an income of close to 1.1 billion pounds in 2022, which was a 13% drop from 2021. The decline came in the back of higher card spending volumes being offset by customers paying off their outstanding credit balances.

The study being conducted on the payments business also comes as the bank teamed up with the Boston Consulting Group (BCG) to perform a strategic review of the banking group. The move that the bank should take to allocate resources between predictable retail operations and volatile investment banking has raised the attention of investors. Investors are also concerned about a $361 million penalty imposed against US authorities because of a trading issue.

In 2022, Barclays reported underwhelming profits and increasing costs, which has, in turn, affected the bank’s shares. The bank has also underperformed the STOXX index of  600 European banks, which has reported an around 6.8% increase. Rival banks such as BNB Paribas and HSBC have also reported a 5% and 17% gain, respectively.