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Barclays sells subprime credit card unit

British bank Barclays Bank is to sell the majority of its subprime credit card division, Monument, to US credit card issuer CompuCredit.

The Atlanta-based company will buy loans of a value of $770 million, leaving Barclays with roughly $130 million of loans, which are to customers with better credit ratings.

News of the sale comes after speculation in February that Barclays was looking to sell Monument, after its Barclaycard unit announced that loans defaults were up by 35 per cent, as second-half profit declined by 71 per cent.

Sussex-based Monument was acquired by Barclays in 2002 from Providian Financial, whereupon the British bank took on $690 million of loans.

Barclays, which this week also announced it is to buy subprime lender Equifirst for $476 million, is currently involved in exclusive negotiations with Dutch bank ABN Amro with a view to merging the two companies.