Barclays FirstPlus portfolio mostly comprises second mortgages – loans secured against the borrower’s home, over and above a mortgage. In an environment of falling house prices, these loans effectively become unsecured borrowings – and are one of the segments of the market where bankers are becoming increasingly nervous.
Industry sources believe Seegers is minded to sell the business at a loss rather than run the risk of exposure to rising bad debt charges. FirstPlus reports its figures within the Barclaycard business, where Barclays has been battling bad debts for the past two years.
Barclays sold Monument, its sub-prime credit card business, to US card firm CompuCredit earlier this year. It also came close to agreeing a sale of its Clydesdale Financial Services store card business to Santander, which owns Abbey. But the deal fell apart over price.
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