Barclays Capital may be one of the only investment banks hiring, but its appeal is waning. Prospective employees said to be demanding guarantees and pay premiums to compensate for the danger of nationalisation.
Shares in Barclays Plc are down more than 10% this morning and down more than 84% in 12 months. Last Thursday alone they plummeted 25% following a Panmure Gordon report suggesting Barclays could be in line for impairment charges of 13bn this year if monolines default and it’s forced to writedown its CLOs .
Barclays is consulting with the Treasury on participation in the UK government’s Asset Protection Scheme. If the scheme is deemed in ‘shareholders’ interests’, it allegedly intends to ask the government to insure a modest 60bn of its 2 trillion of its balance sheet against further writedowns.
It’s not unthinkable that Barclays – and the bankers at BarCap could yet follow Lloyds and RBS into the arms of the British government.
“With Lloyds today, the government appears to have changed the rules about what is an adequate level of capital,” says Simon Maughan, head of European banks analysis at MF Global. “The implication is that Barclays doesn’t have sufficient capital and the only source of additional capital is likely to be the government.”
None of this plays well to BarCap’s ambition to hire people for its European equities and advisory businesses.
But headhunters working for the bank say most prospective hires have other things on their minds.
“There’s a lot of people who want to talk to them,” says one. “Every bank has a significant chance of being nationalized now. There are no risk free options out there.”