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A setback for Bar Cap?

Should Bar Cap bankers really be celebrating the bank’s failure to tie the knot with ABN?

While chief exec John Varley may be disappointed at Barclays’ failure to woo ABN AMRO, others at Barclays Capital are said to be more jubilant than not now that they don’t have to climb into bed with the Dutch heavyweight. “Most people are pretty relieved at not having to integrate what is a fairly basic platform,” says one fixed income headhunter. “Right now they’re a lot more concerned about their sub-prime and leveraged loan exposures than losing ABN.”

Banking analysts say there’s a definite logic to the temptation to breathe easy: “You could see from the various synergy estimates that there were going to be redundancies,” says one. “Barclays Capital employees are no worse off for this not occurring.”

But given the potential gains from the ABN link-up, any backslapping may be a little shortsighted: “ABN would have brought strong trade finance and cash management capabilities, particularly in Asia,” says the analyst.

Alex Potter, equity analyst at Collins Stewart, says acquiring ABN would have propelled Barclays Capital into a leading position globally for debt issuance, and given it leverage in the key Asian markets: “Bar Cap will be weaker than it would have been with the ABN business, which would have brought a good corporate footprint in Asia.”

With Asia set to drive banking growth, will Bar Cap come to rue the day it lost the Dutch maiden to the Scotch ménage à trois? Let us know what you think…

Comments (7)

  1. barcap and barclays are mediocre people. except bob diamond of course.

  2. Barcap people are clever and brilliant, they are much better without ABN.

  3. ABN’s London operations is in pieces and has suffered a massive brain drain over the last 18 months. Sure the Asia piece would have been nice, but at what cost? Barclays have proved they can become a global force through organic expansion over the last 5 years. What’s to stop them achieving the same through their new share holders at a fraction of the cost to the group of expensive acquisitions?

  4. Why don’t Barclays do an all British merger with Standard Chartered, the sleeping giant that seems to have woken up recently, that would give them instant access to Asia, Africa and Fortress Dubai.

  5. ABN in London in pieces? – just not true.
    The new RBS will wipe away Barcap, which should become the next merger target (eg BOA)

  6. barcap in asia outside of the india team is one of the most mediocre shops one ever comes across in asia. And ABN is no better in asia. so two mediocrities won’t have added up to much.

  7. barcap in asia sucks and india is also no better. they seem to be sitting on huge mtm’s on clients whom other banks wont touch with a barge pole…

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