British banking group Barclays is forming a joint venture with Sweden's ForeningsSparbanken (Swedbank) to provide credit cards in the Scandinavian market.
The UK bank is investing £76.5 million for a 50% economic interest in the JV and will finance the transaction from existing cash resources. Swedbank will place all its credit, charge and store card business across Sweden and Norway into the venture.
The business will be based in Stockholm and will start with some 500,000 customers and approximately £280 million in credit card receivables, split roughly equally across Sweden and Norway.
In a statement, Barclay's says with average incomes among the highest in Europe and low credit card penetration, the Nordic market has excellent potential for growth.
Gary Hoffman, chief executive at Barclaycard, says: "This is a powerful partnership which combines FSB's customer and distribution strengths in Scandinavia with Barclaycard's leading-edge risk management and customer acquisition skills."
Following its acquisition of Juniper Financial Corporation in the US last year, this latest move is a further extension of Barclay's strategy to grow its global product businesses. The bank wants its international credit card business to be "as meaningful a contributor" to the group as its UK credit card arm Barclaycard within 10 years. In addition to the US, Barclaycard has operations in countries such as Germany, Spain, Italy, Portugal and South Africa.