Barclays set to reveal the sale of BZW to a foreign buyer

Staff at BZW have been summoned to an early morning meeting today to be told that the investment bank is to be sold to a continental buyer. Tom Stevenson and Lea Paterson report on a volte face by its parent, Barclays.

Barclays is expected today to announce the sale of BZW, one of the few remaining British owned investment banks, to a foreign buyer. The deal, which would be the latest move in an accelerating consolidation of the banking sector, was due to be unveiled at a 7.30am meeting to which all staff have been called.

Market speculation that Commerzbank and ING, the owner of Barings, were the likeliest buyers was last night understood to be wide of the mark.

In a second consecutive day of very heavy trading, Barclays shares closed at 1747p, down from the day's high of 1800p, but more than 20 per cent higher than they traded at only a month ago.

Despite the hectic dealing, Barclays said yesterday that it "was not commenting on market speculation".

The future of BZW has been the source of rumour for months following a period in which both Barclays and NatWest banks have come under fire for the performance of their investment banking arms. But speculation has intensified in recent weeks and Barclays shares have soared on hopes that it might shed its comparatively volatile investment banking earnings to focus on its core retail operation.

A disposal of BZW would, however, represent a change of heart for Barclays, which had resisted calls from its shareholders to pull out of investment banking and publicly backed the firm.

It might also prove to be an expensive change of heart. Barclays chief executive Martin Taylor hired Bill Harrison from Flemings to transform the fortunes of the underperforming investment bank on a package worth pounds 5.8m over two years and he has spent more than pounds 100m beefing up the workforce.

Throughout the process, however, it has been widely understood that Mr Taylor was less attached to BZW than Barclays chairman Andrew Buxton, who ran the division at one stage. One view had the appointment of Mr Harrison as a safe each-way bet - either he succeeded in restoring BZW's fortunes, pleasing shareholders, or he failed and face was saved because the job was beyond even a man of his ability.

In June, the increasingly feverish gossip saw prey turn predator, when Barclays was named as a possible bidder for rival NatWest. Barclays/NatWest speculation died down in July after it was revealed that NatWest and insurance group Prudential had held merger talks.

Rumours surrounding the future of BZW abated in the summer as it started to succeed in a bid to distance itself from the problems at NatWest. BZW announced much improved first half results, despite revealing a pounds 20m "black hole" in its trading operations. Martin Taylor, chief executive of Barclays, said at the time that BZW was "recovering nicely".

Last week, however, the pressure on Barclays was reignited by the unexpected announcement by Travelers Group, owners of retail stockbrokers Smith Barney, that it planned to take over US investment bank Salomon Brothers. Hot on the heels of a similar deal between retail stockbrokers Dean Witter and US investment bank Morgan Stanley, it suggested the consolidation of the sector was gaining an unstoppable momentum.

The Travelers/Salomons deal put pressure on European banks to follow suit or risk being squeezed out by the growing power of the so-called bulge bracket of big American firms like Merrill Lynch and Goldman Sachs. Europeans such as Deutsche Bank, UBS and Commerzbank were named as potential bidders for a string of targets, including BZW.

A takeover of BZW would come just as the investment bank appeared to have regained its self-confidence. It recently completed a move from shabby offices in the City to brand new marble clad accommodation in Canary Wharf in London.

It also seemed to have reversed a dramatic outflow of staff that had seen a constant flow of analysts to other firms.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Life and Style
Suited and booted in the Lanvin show at the Paris menswear collections
fashionParis Fashion Week
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
News
An asteroid is set to pass so close to Earth it will be visible with binoculars
news
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project