Barclays, the UK’s
second-largest banking group, has been linked with buying a large
US retail bank to supplement its investment banking presence in the
country. A spokesperson from Barclays declined to
comment.
The bank is reported to be looking at one of
the bailed-out US banks as potential targets, including SunTrust,
PNC Financial and US Bancorp, the parent company of US Bank, the
sixth-largest bank in the US by assets.
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An analyst familiar with the situation
downplayed the rumours and said the move “does not make a lot of
sense” for the bank at a time when capital preservation should be a
priority.
He said that Anthony Jenkins, the new head of
Barclays’ retail banking activities, is preparing a strategy plan
that will go to the board in the next few months.
“It would be remiss of him when doing the
strategy plan not to mention the possibility of expansion in the US
and for it to have any real value they would have to do a series of
small bolt-ons or one large-scale acquisition,” he said.
The analyst cited Barclays’ already large
portfolio, namely its stake in Lehman Brothers following the firm’s
collapse in September 2008, as examples of past successes – but
remained sceptical.
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By GlobalData“They have made a lot of acquisitions already,
especially at a time when everyone is sensitive on the capital side
of things. It doesn’t really make sense to make a substantial
acquisition when the focus should really be on capital,” he
added.
Barclays recently sold its asset management
arm, Barclays Global Investors, to BlackRock, suggesting a focus on
building its capital base, he added.
The bank’s retail and commercial unit (GRCB)
recorded profits down by 42.7% from £4.4bn ($6.7bn) in 2008 to
£2.5bn.
The drop in GRCB earnings was most marked
within the bank’s UK retail unit: a 55% fall in pre-tax profits to
£612m in 2009 from £1.37bn in the previous year.
Total savings account numbers at Barclays UK
arm increased by 10% to 13.2m but total current account numbers
fell by 500,000 to 11.2m. Barclaycard profits remained
strong, down by only 4%.
|
FUNDAMENTALS |
|||
|
US – Barclays’ possible |
|||
|
PNC Financial |
SunTrust |
US Bank |
|
|
Group profits ($bn) |
2.4 |
-1.5 |
2.2 |
|
Retail profits ($m) |
136.0 |
-722.3 |
917.0 |
|
Retail deposits ($bn) |
74.0 |
116.0 |
82.0 |
|
Deposits per branch ($m) |
29.4 |
68.9 |
27.2 |
|
Number of branches |
2,512 |
1,683 |
3,015 |
|
Source: RBI |
|||
|
EARNINGS |
|||
|
Barclays – GRCB divisional |
|||
|
2009 (£m) |
2008 (£m) |
% change |
|
|
UK Retail Banking |
612 |
1,369 |
-55 |
|
Barclays Commercial Bank |
749 |
1,266 |
-41 |
|
Barclaycard |
761 |
789 |
-4 |
|
GRCB |
130 |
250 |
-48 |
|
GRCB |
-254 |
141 |
n/m |
|
GRCB |
506 |
554 |
-8 |
|
Source: Barclays |
|||
