Outlook: RBS merger may be best for Barclays
Wednesday 14 April 1999
Since a merger with National Westminster Bank, or any other "English" clearer, is almost bound to be ruled out on competition grounds, the only obvious candidates would be the two Scottish banks, of which Royal Bank of Scotland must be the front runner. With a market capitalisation of little more than half that of Barclays, any such proposal would essentially have to be framed as a management buy-in, or reverse takeover. Demoralised, bemused and out to lunch though what is left of the Barclays board might be, is this something it could reasonably contemplate?
Certainly Sir George Mathewson, Royal Bank of Scotland's chief executive, is ambitious and accomplished enough to pull it off. The cost savings to be had from such a combination would plainly not be as dramatic as with an English clearer, but in retail banking and corporate lending they might still add up to several hundred million annually. Furthermore, it would provide some kind of a solution to the problem of who to lead Barclays into the next millennium.
Barclays' chances of attracting another top notch banker from the US like Mike O'Neill would seem to be slim. Even if one were available for hire at short notice, nobody likes being second choice, and in any case, nearly everyone who's any good is locked into US remuneration packages that would make any such acquisition prohibitively expensive. Executives of Mike O'Neill's ability who are also prepared to do the job at a reasonable rate, are in short supply.
Sir George would undoubtedly have been on Barclays' original shopping list for the job, but there would be no good reason for Sir George, at this relatively late stage in his career, to ditch his Edinburgh power base for the snakepit of London. If he could bring it with him, however, that might be a different matter.
The only probable alternative to Barclays' management problems would appear to be an internally groomed candidate, but even if there is someone of sufficient calibre waiting in the wings, this solution is unlikely to be as pleasing to the City as a fully fledged merger.
Martin Taylor, the previous chief executive, always believed a further big consolidation of British banking inevitable, and during his time at Barclays he made several failed attempts to bring it about. It's ironic, but by walking out in the way he did and prompting the present vacuum in leadership, Mr Taylor may end up achieving his aim afterall.
- 1 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 2 Google April Fools': company unveils backwards search engine and huggable digital assistant
- 3 I might be an MP, but that doesn't stop me fighting sexism with my breasts
- 4 April Fools' Day 2015: The best hoax news stories from around the internet
- 5 Gamers confess the worst things they've done in The Sims
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
Katie Hopkins reported to the police for race hatred by Labour MP Simon Danczuk after tweet about Pakistani men
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...