Barclays; New Segments Could Hint At Willingness To Sell US Cards

Barclays (BARC LN); one thing worth noting from the strategic review; "resegmentation" of the business may well indicate a willingness to consider “all options”. A sale of US cards would be credit positive, in our view.

• Barclays is, as part of the strategic review, conducting a “resegmentation”, something companies do periodically and, whilst presentational and having no net economic effects immediately, it can give hints as to longer-term thinking.
• Barclays is moving to five “focused operating divisions” which, for the first time, separates the US consumer bank from the private bank & wealth management business. As we mentioned in our early comment on Capital One-Discover, we’ve felt the US cards business is somewhat incongruous within the group.
• Selling a business is often best achieved without advertising it too widely and we cannot help but feel this explicit separation, highlighting the different economics and dynamics of this business, could be helpful in exactly that process.