UK-based lender Barclays Plc (BCS, BARC.L) plans to offer an online savings bank in the U.S. to secure more stable funding for its international credit card business, reports said Sunday. The company would target U.S. savers from Monday.
The lender is said to offer interest hovering around 1 percent on these deposits as it seeks to have diversity of funding. It is expected to pay as much as 1.75 percent on savings for five years.
By revenue, Americas is the bank's second-biggest market outside the U.K. Barclays launched a similar scheme in Germany recently and received about $1.3 billion in deposits in two months.
Barclays provides credit cards through Barclaycard. The business has around 5 million customers. The company does not have a retail branch in the US and is not planning to start one.
The move comes amid increasing regulatory demand on banks to use locally raised funds to finance local retail operations. Such an action will mitigate the impact of currency fluctuations. Barclays has so far been raising money for such operations from capital markets.
BARC.L closed on Friday higher by 2.25 pence or 1.06 percent, at 215.10 pence on a volume of 47.19 million shares.
BCS settled on the NYSE lower by $0.25 at $13.44 on 3.1 million shares.
For comments and feedback: editorial@rttnews.com