LONDON, March 1, 2011 (AFP) - British bank Barclays said Tuesday that it has agreed to buy the Egg credit card division from US banking giant Citigroup for an undisclosed amount.
"Barclays Bank Plc has agreed to acquire Egg's UK credit card assets," the lender said in a statement.
"Under the terms of the transaction, Barclays will purchase Egg's UK credit card accounts, consisting of approximately 1.15 million credit card accounts with approximately £2.3 billion of gross receivables."
The deal is expected to be completed in the first half of the year, subject to regulatory approvals. Egg will then be integrated with the group's own credit card division, Barclaycard.
"The acquisition of Egg's UK credit card accounts has been priced at a significant discount to gross receivables," said Chris Lucas, group finance director at Barclays.
"Based on current projections, we expect the transaction to exceed the financial return targets set out at our recent results announcement."
British insurer Prudential launched its pioneering Internet bank Egg in 1998 at the height of the dotcom boom. It floated the company on the stock market in 2000 but decided to take the division private in January 2006.
One year later, in 2007, the insurer sold Egg to US financial services giant Citigroup for £575 million ($920 million).
"This acquisition reinforces Barclays Global Retail Banking's strategic ambition to achieve greater depth in its chosen markets and businesses," Barclays said.
Last month, Barclays reported 2010 profits up by more than a third as bad debts fell dramatically and cut its staff bonuses in line with a government-brokered deal.
Pre-tax profit jumped 33 percent to £6.08 billion last year. Barclays survived the global financial crisis without state support, unlike many rivals.