(Bloomberg) – Barclays will work with Brookfield to uninstall some of its payment operations, part of the lender’s increase in earnings.
According to a statement on Thursday, Barclays agreed to inject £400 million ($529 million) into £400 million ($529 million) to turn the payments division into an independent company.
Brookfield will be entitled to economic incentives linked to performance, and in three years there will be a four-year window to acquire up to 80% of the payment companies. If sales continue, Barclays is expected to fully resume its investment in the overhaul and retain the other 20%.
“Our partnership with Brookfield recognizes that opportunities in our business exceed the foundations we have built so far,” said Matt Hammerstein, head of the bank at Barclays UK.
Under CEO CS Venkatakrishnan, Barclays has committed to investing more in its UK operations as well as in U.S. consumer products to provide buoy returns for long-lagged competitors. To achieve this, it has been abandoning non-core operations.
Barclays said part of the transaction that would not affect part of the payment business it directed was months after Barclays completed a deal to dispose of its German consumer finance division. The bank also agreed in recent months to sell its portfolio of bad Italian mortgages.
British banks follow the steps of many of their European competitors by focusing on the competition among merchants. These divisions help businesses process electronic payments, often sold to competitor payment companies or private equity funds that have merged into larger platforms.
Brookfield has been seeking to further expand its financial infrastructure after Brookfield purchased £2.2 billion from International Holdings plc in 2023. That same year, the Canadian Asset Manager hired former WorldPay CEO Ron Kalifa as vice chairman and head of financial infrastructure investment to put it within the sector’s business scope.
According to a demonstration on the bank’s website, Barclays’s merchant acquisition business provides payment terminals and connects to digital wallets. The speech shows that this is considered the third largest acquirer in Europe.
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