Barclays PLC announces its wholly-owned US consumer banking subsidiary, Barclays Bank Delaware, has agreed to acquire Best Egg, Inc. for $800 million. Completion of the transaction is currently said to be subject to required regulatory approvals as well as other customary conditions. Best Egg is a US D2C personal loan origination platform with a focus on prime borrowers and a track record of risk management. The business has reportedly grown steadily since its inception back in 2013 and has facilitated over $40 billion in personal loans.
During the current year, Best Egg is on track to facilitate over $7 billion in personal loan originations via its platform. The loans are said to be funded via structures such as securitisation programs as well as forward flow arrangements offered by a range of alternative asset managers, with the business generating “fee-based capital-light income as a result of its loan origination and servicing activities.”
The business services appr. $11 billion in personal loans. Following Completion, Barclays expects to continue this model and “retain a small portion of Best Egg’s new lending flow on its balance sheet.”
Best Egg now is said to complement USCB’s partnership-driven credit card business, which offers unsecured personal lending to clients via co-brand card partner programs.
The transaction enhances USCB’s franchise by acquiring digital and risk capabilities in this part of the US consumer finance market and offering flexibility in the deployment of lending capacity.
The consideration paid for Best Egg reportedly represents a “high-single digit Price/Earnings multiple.”
The acquisition, including the realisation of synergies, is “expected to generate an attractive return on investment for Barclays, comparable to our three highest-returning UK businesses, over time.”
It is expected to be accretive “to USCB’s Return on Tangible Equity (RoTE) in 2027, supporting delivery of its stated mid-teens RoTE target post 2026. It is further expected to be accretive “to Barclays’ RoTE and Earnings Per Share in 2027.”
The Best Egg acquisition is set to complete in Q2 of next year, following the completion of the “previously-announced sale of Barclays’ American Airlines co-brand credit card receivables.”
The net effect of the transactions is estimated to be “an approximate 6bp increase in the Group’s CET1 ratio in Q2 2026.” The Best Egg acquisition is expected to consume approximately “16bps of Group CET1 capital upon Completion.” The transaction will not impact Barclays’ stated total distribution target of “at least £10 billion between 2024 and 2026.”