Credit Suisse to buy only part of BZW

Barclays' gamble of announcing the sale of BZW before it had found a buyer appeared to have backfired last night. The bank said it was in exclusive discussions with CSFB to sell only around half the equities and corporate finance businesses it had originally planned to, reports Tom Stevenson, Financial Editor.

Martin Taylor, Barclays' chief executive, arrived at BZW's Canary Wharf headquarters late yesterday afternoon to tell staff that the bank had failed to find a buyer for the whole of the equities and corporate finance arms of its investment banking subsidiary.

The announcement dealt a severe blow to Mr Taylor. He had already come in for widespread criticism for the manner in which he had handled Barclays' withdrawal from investment banking and one insider said last night: "He has plainly overplayed his hand a bit. He doesn't look very clever at all."

The bank attempted to put a positive gloss on the announcement that Credit Suisse First Boston, the last remaining potential buyer not to have dropped out, was now only interested in buying part of what was on offer. A spokesman said: "We always felt comfortable with various disposal options. Martin Taylor always said the deal would be buyer-shaped."

A CSFB-shaped deal will see the Swiss bank buying only BZW's UK and continental European equities, equity capital and mergers and acquisitions advisory businesses. It has shunned the Australasian and Asia Pacific operations and will also not buy BZW's equity derivatives business.

Barclays said last night it was confident of finding a buyer for those operations from among the 20 or so short-listed potential buyers who have looked over BZW's books since it was put on the block last month.

Mr Taylor defended his decision to put BZW up for sale without a firm buyer in mind on the grounds that such a complex dismemberment would inevitably leak, causing more damage than an open sale. But yesterday's half-sale underlined the risks of a process that ended up with Barclays talking to a single buyer in a powerful bargaining position.

There was no comment from Barclays on the price offered by CSFB, but it is thought to be dependent on individual negotiations between the Swiss bank and staff at BZW. The final price it pays is thought to be contingent on who remains and the price of locking them in.

News of the negotiations came as National Westminster Bank said it was to close the Hong Kong global debt market operations of NatWest Markets, its beleaguered investment banking arm. Some 55 of the 100-strong team stand to lose their jobs. The remainder will be integrated with NatWest'sglobal debt market teams in Singapore and Tokyo.

The move is part of a review of NatWest's investment banking business by Chip Kruger, head of NatWest Markets. Mr Kruger was concentrating on "refocusing the investment banking business", said a spokeswoman. "It is of benefit to both our clients and our management if we concentrate on markets where we have a competitive advantage."