Barclays to Exit Entercard JV With $273M Sale to Swedbank

Barclays PLC BCS has agreed to sell its stake in Entercard Group, a Nordic consumer credit joint venture (JV), to partner Swedbank AB for SEK 2.6 billion ($273 million) in cash. Completion of the deal is expected by year-end, pending regulatory approvals.

The deal price, set at Entercard’s book value as of March-end 2025, underscores Swedbank’s commitment to expanding its regional consumer finance franchise.

Capital Release From Sale to Fortify BCS’ Core Strategy

For Barclays, the disposal marks another step in its ongoing strategy to streamline operations and exit non-core markets. It follows Barclays’ April 2025 agreement with Brookfield Asset Management to spin off most of its U.K. merchant-acquiring business, reinforcing management’s focus on wholesale banking, U.S. and U.K. credit cards, and its domestic retail arm.

The Entercard sale is expected to release £900 million of risk-weighted assets, adding four basis points to BCS’ common equity tier 1 (CET1) ratio.

Entercard will also repay £1.2 billion in funding currently provided by Barclays Bank, reducing the U.K. lender’s balance sheet commitments.

For Barclays, the sale is modest in size but directionally consistent with its strategy of capital discipline and refocusing on scale businesses. The incremental CET1 uplift and liquidity release will provide flexibility, albeit limited earnings impact.

Barclays Ends Two-Decade Nordic Partnership

Entercard, founded in 2005 as a JV between Barclays and Swedbank, is a leading provider of credit cards and personal loans across Sweden, Norway, Denmark and Finland. As of March 2025, the company reported total assets of SEK 36 billion and equity of SEK 5.2 billion. It serves 1.5 million customers through both proprietary and co-branded products and employs around 450 staff.

Upon the completion of the deal, Swedbank will assume full ownership, making Entercard a wholly integrated part of its operations. Despite the change in ownership, Entercard will continue to operate under its brand identity.

Barclays’ Move a Strategic Upside for Swedbank?

While the acquisition will dilute Swedbank’s CET1 ratio by approximately 30 basis points, the bank views full control of Entercard as a strategic investment. Management highlighted that the buyout cements Swedbank’s position as the largest card issuer in the Nordics and Baltics, creating scope to enhance customer offerings and accelerate digital initiatives under its “15/27” business plan.

By consolidating Entercard, Swedbank secures a scalable consumer-finance platform in its core markets, while Barclays pockets cash and redeploys capital toward higher-priority businesses. 

Over the medium term, integration synergies and revenue opportunities from cross-selling may outweigh the capital hit, positioning Swedbank for stronger fee and lending growth in the region.

Barclays’ Other Business Simplification Efforts

In February 2025, BCS divested its Germany-based consumer finance business. In November 2024, it acquired Tesco’s retail banking business, which complements its existing business and strengthens its position in the market.

Moreover, last year, the company divested its Italian mortgage portfolio. It sold $1.1 billion in credit card receivables to bolster the lending capacity for Barclays Bank Delaware in the United States.

In 2023, Barclays acquired Kensington Mortgage, which bolstered its mortgage business in the U.K.. Driven by these initiatives, Barclays’ profitability is expected to improve over time.

Barclays’ Price Performance & Zacks Rank

So far this year, shares of Barclays have rallied 50.7%, outperforming the industry’s 34.8% growth.

Currently, BCS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Divestitures by Other Foreign Banks

Last month, HSBC Holdings plc HSBC agreed to sell its life insurance business in the U.K., HSBC Life (UK) Limited, to Chesnara, a life and pensions consolidator, for a cash consideration of £260 million. The completion of the deal, subject to customary regulatory approvals, is expected in early 2026.

The move aligns with HSBC’s broader repositioning strategy to streamline operations, focusing more on markets with strong growth potential, as highlighted by CEO Georges Elhedery in October 2024.

The sale of the life insurance business in the U.K. is, thus, the latest in a series of asset disposals by HSBC as the bank seeks to focus more on Asia.

Earlier this month, Bloomberg reported that Bank of Montreal BMO was exploring the sale of its transportation finance business, which has approximately $11 billion in assets, with an estimated valuation of $1 billion.

The potential buyers include private equity firms and private credit players. BMO had acquired this transportation finance unit from General Electric Capital Corporation in 2015, significantly expanding its commercial vehicle lending operations across the United States and Canada.

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This article originally published on Zacks Investment Research (zacks.com).

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