Barclays Mulling Sale of Subprime Credit Card Business

UK-based Barclays, taking a page from the Danny Glover school of project management, has decided it’s too old for this junk – “this junk” being its ridiculous amount of exposure to bad consumer debt.

So – it’s getting rid of part of its Barclaycard operations, Monument — the credit card brand it uses to target poorer consumers — , which should >knock on wood< hopefully dramatically reduce the thumps it’s been taking.

It is estimated that Monument has loaned up to £1bn to consumers, at interest rates of 35 percent or more.

Barclays is in good company.  Prudential recently decided to drop its Egg, the internet bank portion of its operations, after a large upsurge in bad debt charges led to huge losses in the business. HSBC isn’t helping things, either; it issued its first-ever profits warning due to sub-prime mortgage issues.

Quoted in the London Telegraph, one analyst, hauling out the Vocab Power, had this to say: “Barclays’ results are going to be very strong, but if they are looking to sell Monument then that tells you they are not especially sanguine about the credit environment.”