With the sombre mood music of a 33 percent drop
in profits that the bank’s chief executive John Varley described as
“acutely disappointing”, the credit card arm of Barclays has
recorded 30 percent growth for the year so far, making Barclaycard
the fastest growing business line within the bank’s operations. For
its interim 2008 results, Barclaycard posted a £388 million ($756.8
million) profit before tax – up from £299 million the same time
last year.
in profits that the bank’s chief executive John Varley described as
“acutely disappointing”, the credit card arm of Barclays has
recorded 30 percent growth for the year so far, making Barclaycard
the fastest growing business line within the bank’s operations. For
its interim 2008 results, Barclaycard posted a £388 million ($756.8
million) profit before tax – up from £299 million the same time
last year.
Following the Barclaycard purchase of Goldfish
from Discover in February this year (see CI 395), the company was
able to acquire a further 200,000 new customers in the first half
of 2008.
from Discover in February this year (see CI 395), the company was
able to acquire a further 200,000 new customers in the first half
of 2008.
However, Barclaycard has maintained that it has
kept a selective approach to prospective new cardholders in light
of the current financial pressure. The company has continued to
reject around half of the applications for new cards it receives
(see CI 399).
kept a selective approach to prospective new cardholders in light
of the current financial pressure. The company has continued to
reject around half of the applications for new cards it receives
(see CI 399).
While the company remains the largest credit
card issuer in the UK, Barclaycard has continued to focus on its
expanding overseas business. For the first half of 2008,
Barclaycard International’s business grew by 64 percent from the
same time last year, and contributed just over a quarter of
Barclaycard’s overall profits at around £100 million.
card issuer in the UK, Barclaycard has continued to focus on its
expanding overseas business. For the first half of 2008,
Barclaycard International’s business grew by 64 percent from the
same time last year, and contributed just over a quarter of
Barclaycard’s overall profits at around £100 million.
More tellingly, Barclaycard International has
been the source of over 75 percent of Barclaycard’s new cardholders
in 2008 so far – a clear indication that this is where the
company’s growth will be coming from in the next few years. There
are now over 11 million cards issued by the company in overseas
markets, including Germany, Sweden and South Africa.
been the source of over 75 percent of Barclaycard’s new cardholders
in 2008 so far – a clear indication that this is where the
company’s growth will be coming from in the next few years. There
are now over 11 million cards issued by the company in overseas
markets, including Germany, Sweden and South Africa.
Barclays predicts the US arm of Barclaycard,
where it continues to push its partnership-led business model, will
contribute $150 million in profit before tax by the end of the
year, thus fulfilling targets the bank had set following the
acquisition of the business from Juniper in 2004.
where it continues to push its partnership-led business model, will
contribute $150 million in profit before tax by the end of the
year, thus fulfilling targets the bank had set following the
acquisition of the business from Juniper in 2004.
While impairment charges for the overseas
operations of Barclaycard rose by ten percent during this period,
this was offset by a £62 million reduction in impairment charges in
the UK. Profit for the year so far has also included a £41 million
boost from Goldfish.
operations of Barclaycard rose by ten percent during this period,
this was offset by a £62 million reduction in impairment charges in
the UK. Profit for the year so far has also included a £41 million
boost from Goldfish.
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