Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  Discover Financial Services    DFS

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

Barclays Rolls Out Online Bank Accounts In U.S. As It Pushes Card Growth

share with twitter share with LinkedIn share with facebook
share via e-mail
0
05/07/2012 | 03:23pm CEST
   By Andrew R. Johnson 
   Of  
 

Barclays PLC's (BCS, BARC.LN) U.S. operation is getting into the online-banking business as it works to diversify funding for its growing credit-card operations.

The British bank said Monday it is offering a high-yield savings account and certificates of deposit through its Barclays Bank Delaware subsidiary. The online-only products are the first deposit accounts Barclays has offered in the U.S. since the early 1990s, when it exited the branch-banking business here.

Barclays hopes to cash in on demand for online banking, a business that has attracted other credit-card lenders including Discover Financial Services (>> Discover Financial Services) and Capital One Financial Corp. (>> Capital One Financial Corp.), which recently bought ING Groep N.V.'s (ING) U.S. online bank in a $9 billion deal.

The move should also enable Barclays to more cheaply fund its expanding credit-card portfolio, which reached $12.15 billion in loans last year.

"If you look at the liability side, this is going to play an important role in that growth," said Steve Carp, managing director of deposits for Barclays US. "Retail deposits are certainly one that has a lot of supply and is one we felt like it made sense to tap into."

Barclays, which has no branch presence in the U.S., funds the majority of its credit-card loans mainly through intercompany funding from the parent company and brokered deposits, Carp said. Such deposits are generally considered more volatile than retail deposits, which are "considered more sticky and higher quality," said Don Fandetti, an analyst with Citigroup Inc. (C).

Over time, it plans to shift this mix and may look to securitize card loans. The securitization market shut down during the financial crisis, which prompted other lenders to seek retail deposits. Accounting rule changes that took effect in 2010 requiring lenders to bring certain securitized loans held off their balance sheets back onto their books further pushed card issuers to seek deposits.

"It's important for the U.S. business to be self-funded," Carp said. "That's a goal we're working toward."

Barclays was the 11th largest credit-card lender in the U.S. last year, growing its outstanding loans by about 17%, according to the Nilson Report, a payments-industry newsletter. It entered the U.S. credit-card market in 2004 with its acquisition of lender Juniper Financial Corp and has since tried to grow partly through co-branding by issuing credit cards for Barnes & Noble Inc. (>> Barnes & Noble, Inc.), US Airways Group Inc. (LCC) and other partners.

Barclays's move into online banking comes as Capital One, Discover and American Express Co. (>> American Express Company) are growing their online businesses. Discover offers savings accounts, money-market accounts and CDs and is planning to offer checking accounts this year. The credit-card lender has grown its consumer deposits to more than $27 billion from just over $3 billion in 2007.

Business lender CIT Group Inc. (>> CIT Group Inc.) started an online bank in October that offers savings and CDs, and more recently General Electric Co. (>> General Electric Company) said it is buying MetLife Inc.'s (>> Metlife Inc) online-banking platform and $7.5 billion in deposits to help fund its commercial finance business.

"The market for deposits is big and thriving," said Dan Geller, executive vice president for Market Rates Insight, which tracks deposit products. "Consumer deposits, not just for online banks that fund credit cards but in general, are the cheapest and most cost-effective ... funding."

-By Andrew R. Johnson, Dow Jones Newswires; 212-416-3214; [email protected]

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on DISCOVER FINANCIAL SERVICE
05/24 DISCOVER FINANCIAL SERVICES : Global Network Signs Deal with Desjardins Group to..
05/22 DISCOVER FINANCIAL SERVICES : to Present at Bernstein’s Strategic Decision..
05/16 DISCOVER FINANCIAL SERVICES (NYSE : DFS) Files An 8-K Submission of Matters to a..
05/16 DISCOVER FINANCIAL SERVICES : Submission of Matters to a Vote of Security Holder..
05/15 DISCOVER FINANCIAL SERVICES : to Present at Deutsche Bank 7th Annual Global Fina..
05/15 DISCOVER FINANCIAL SERVICES (NYSE : DFS) Files An 8-K Regulation FD Disclosure
05/15 DISCOVER FINANCIAL SERVICES : Regulation FD Disclosure, Financial Statements and..
05/09 DISCOVER FINANCIAL SERVICES : ex-dividend day
05/08 DISCOVER FINANCIAL SERVICES : Named One of the 2017 Best Companies in Arizona fo..
05/04 DISCOVER FINANCIAL SERVICES : Reports First Quarter Net Income of $564 Million o..
More news
Sector news : Consumer Lending - NEC
05/12 U.S.-China trade deal serves up potential corporate winners
05/12 Even with trade pact, U.S. payment networks uncertain on China operations
05/08DJBank of America Pays Peanuts for Deposits, but the Money Keeps Flowing In
05/04DJSqueeze on Car Loans Deepens Sales Drop -- WSJ
05/03DJBanks Pull Back on Car Loans as Used-Auto Prices Plummet
More sector news : Consumer Lending - NEC
News from SeekingAlpha
05/25 The Relative Value Of Cryptocurrencies
05/24 Searching For Value
05/22 DISCOVER FINANCIAL : Perpetually Cheap
05/22 Sallie Mae May Face Increasing Competition As Market Looks Bright
05/19 "Subprime problem" for credit card sector - Wells Fargo downgrade
Advertisement
Financials ($)
Sales 2017 9 756 M
EBIT 2017 5 575 M
Net income 2017 2 267 M
Debt 2017 -
Yield 2017 2,09%
P/E ratio 2017 9,94
P/E ratio 2018 8,96
Capi. / Sales 2017 2,33x
Capi. / Sales 2018 2,20x
Capitalization 22 735 M
More Financials
Chart DISCOVER FINANCIAL SERVICE
Duration : Period :
Discover Financial Service Technical Analysis Chart | DFS | US2547091080 | 4-Traders
Full-screen chart
Technical analysis trends DISCOVER FINANCIA...
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 77,0 $
Spread / Average Target 29%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
David W. Nelms Chairman & Chief Executive Officer
Roger C. Hochschild President & Chief Operating Officer
R. Mark Graf Chief Financial Officer & Executive Vice President
Glenn P. Schneider Chief Information Officer & Executive VP
Gregory C. Case Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
DISCOVER FINANCIAL SER..-17.05%22 735
SYNCHRONY FINANCIAL-24.54%22 197
BAJAJ FINANCE LTD14.24%11 244
ALLY FINANCIAL INC0.47%8 775
INDIABULLS HOUSING FIN..67.42%7 150
ACOM CO., LTD.-6.85%6 821
More Results