Seems unlikely. In fact, seems very, very unlikely. The likelihood of Barclays making an imminent move on either Lehman – or, even more improbably, UBS – is roughly equivalent to the chance that roads will be clear on Bank Holiday Monday.
The main reason for scepticism is that Barclays can’t afford it.
“Before it makes any acquisitions, Barclays’ first port of call is capital raising,” says James Hudson, an analyst at Keefe, Bruyette & Woods. “Barclays will need to raise a few billion if it’s to bring itself up to its target capitalisation of 5.25%, and even then it will lag its counterparts who are on 6-7%” he adds.
“This would be more than the market would bear,” agrees Sandy Chen at Panmure Gordon, “particularly when you look at how HBOS and B&B are likely to be received when they come to the market.”
There’s also the issue of overlap – in a Lehman liaison the bloodletting in fixed income would be torrential. And there’s the fact that Barclays has no real need to buy in a whole new business when it can simply poach selectively from elsewhere, as was the case with those ABN bankers last week.
“The time to buy Lehman would have been in March,” says one headhunter, who works with BarCap. “Buying Lehman would bring a lot of headaches, particularly when they can just pick teams off instead.”