Barclays has been exploring a potential merger with rival banks including Standard Chartered, according to a report in the Financial Times.
The FT said Barclays directors had held “exploratory conversations” about possible deals in response to pressure from Edward Bramson’s US-based activist investment fund Sherborne, which has a 5.4% stake in the bank.
John McFarlane, Barclays’ chairman, was in favour of a deal with Standard Chartered, according to the FT, while Sir Gerry Grimstone, who chairs the Barclays International unit, was also said to be supportive of the idea.
A private conversation took place between a director at each bank about the potential benefits of such a deal but no formal or informal bid approach had taken place, the FT said.
Barclays declined to comment on the report.
A spokesman for Standard Chartered said: “We are entirely focused on executing our strategy and do not comment on this type of speculation.”
Shares in Barclays were down 0.4% on Wednesday morning after the report was published, while Standard Chartered shares rose 2.2%.
Sources close to Barclays poured cold water on the report and said the bank was not working on a deal with any of its rivals.
Bramson is calling for a shake-up of the bank that is thought to involve a radical reduction in activities at its underperforming investment bank, in a plan to cut costs and boost shareholder returns.
On the Other story from international media
The marriage of Barclays and Standard Chartered is in many ways a tantalising prospect.
Take the new transatlantic Barclays, with a big US and European investment banking business, and a very profitable UK retail and credit card business, and bolt it on to Standard Chartered's Asian, African and Middle East trade expertise.
Not only that, but Standard Chartered's big Asian deposit base would be a source of cheap capital for Barclays investment bank. Voila - an all-singing, all-dancing bank with a truly global footprint.
It's such a tempting idea that it gets kicked around every few years and folks are now doing it again for some understandable reasons. Barclays has made good progress clearing up some big outstanding items.
The fine from the US authorities over risky mortgage selling: sorted. The criminal charges over the way it raised money in Qatar in the aftermath of the crisis: dropped. The outstanding investigation into chief executive Jes Staley's handling of a whistleblowing incident last year: resolved, with a fine and yellow card from the City watchdog. The ring fencing of its UK retail bank: complete.
But What Bloomberg reporting regarding Barclays & Stanchart
The long-awaited marriage of Standard Chartered Plc is a story of three decades of yearning that’s never found consummation.
The latest potential suitor is Barclays Plc, which is reported by the Financial Times to be exploring a merger (read takeover) of StanChart. London-listed Barclays isn’t considering a possible deal, Reuters reported, citing two people close to the lender.
In the event of a proposal, expect a polite but firm rejection.
The deal can be made to look sensible, even sexy, in a PowerPoint presentation: Barclays is big in U.S. investment banking, thanks to its acquisition of most of Lehman Brothers Holdings Inc.’s American business in the wake of the financial crisis. It also has a large U.K. and U.S. credit card business. Standard Chartered’s prowess is in Asia and Africa, the two growth areas in banking, and a neat fit into Barclays’s geographic hole. StanChart also has a juicy deposit franchise in Hong Kong and Singapore, where it’s big in mortgages.
Such a deal might have flown in 2004, but things are different now. What StanChart needs is a stronger presence in U.S. commercial banking and a partnership with a fintech player to sharpen its edge in trade finance, which may be the first banking activity to embrace blockchain. For Barclays, merging with Credit Suisse Group AG, to benefit from its wealth management franchise, may make more sense as a shield from credit card defaults, which are bound to increase as interest rates rise. Barclays sold its private-banking business in Asia in 2016 because it lacked scale.
StanChart’s destined to stay single. In 1986, Lloyds Bank Plc’s attempted takeover of the emerging markets lender was foiled by three tycoons, including late Singapore-based financier Khoo Teck Puat, whose stock was ultimately acquired by Temasek. In 2001, StanChart fired CEO Rana Talwar amid rumors the ex-Citibanker was willing to consider informal approaches from Lloyds and … Barclays. Since the financial crisis, Spain’s Banco Santander SA and New York-based JPMorgan have been mentioned as potential suitors. Singapore’s DBS Group Holdings Ltd., also partly owned by Temasek, is another frequently mooted acquirer. DBS CEO Piyush Gupta, however, is probably happier buying digital businesses to boost shareholder returns.
If it’s now Barclays’s turn to try its luck, StanChart should jilt this latest admirer, too.
Source: Bloomberg, The guardian & BBC.
0 comments:
Post a Comment