Barclays Reported To Be Exploring A Potential Merger With Standard Chartered

Advertisment
Photo by Håkan Dahlström from Flickr

According to a report in the Financial Times,  a potential merger with rival banks such as Standard Chartered is being explored by Barclays.

The FT said that the directors of Barclays had held “exploratory conversations” over potential deals as a response to pressure from Sherborne, the activist investment fund of Edward Bramson that is based in the United States which holds a 5.4 percent stake in the bank.

According to the FT, the chairman of Barclays, John McFarlane, was in favour of a deal with Standard Chartered, while the chairman of the Barclays International unit, Sir Gerry Grimstone, was also revealed to be supportive of the said idea.

A private discussion took place between a director at each bank regarding the possible benefits of such a deal. However, the FT said that no formal or informal bid approach had occurred.

Barclays refused to give a comment on the report.

A spokesperson for Standard Chartered stated: “We are entirely focused on executing our strategy and do not comment on this type of speculation.”

The shares in Barclays were down by 0.4 percent on Wednesday morning following the release of the report, while the shares of Standard Chartered rose by 2.2 percent.

Some sources who are close to Barclays poured cold water on the said report and disclosed that the bank was not working on a deal with any of its rivals.

Bramson is requesting a shake-up of the bank that is believed to involve a radical decline in activities at its underperforming investment bank, in an attempt to cut costs and raise shareholder returns.

Earlier this month, the chief executive of Barclays, Jes Staley, met Bramson in New York and was informed by the activist investor that he was still working on his proposals for the future of the bank.

Also this month, UK regulators imposed a fine on Staley amounting to £642,430 for a breach of conduct after he tried to unmask a whistleblower. As well as being fined by the Prudential Regulation Authority and the Financial Conduct Authority, Barclays said that it would claw back £500,000 of the bonus of Staley over the matter.

The bank is also required to annually submit a report to the regulators explaining how it handles whistleblowing after they expressed concerns regarding its existing systems.