The Great Debate UK
Diamond hangs on to Barclays crown jewel
You have to hand it to Barclays. The reported sale of BGI, its fund management arm, to BlackRock for $13 billion is probably the best way that the bank could bolster its capital ratio.
It looks like it will end up with around $8 billion in cash and a fifth of the enlarged asset manager.
The gain on the sale would lift its equity tier 1 ratio to 6.8 percent from just over 6 percent, according to Nomura.
Combined with the strong earnings coming through from BarCap, its investment bank, this should be high enough for Barclays to survive both the further losses on legacy assets that it has so far resisted and recessionary write-downs.
The terms of the sale have not yet been disclosed, but they look like they will be much better for Barclays than April’s proposed sale of iShares, the most attractive part of BGI, to CVC, a private equity group.
Commerzbank acts fast to bury Kleinwort
– Alexander Smith is a Reuters columnist. The opinions expressed are his own –
Dresdner Bank spent 15 years tinkering with the investment banking operations of Kleinwort Benson, the UK merchant bank it bought in 1995.
Nikko Cordial hard to swallow for SMFG
– Alexander Smith is a Reuters columnist. The opinions expressed are his own –
The deal may have lifted the bank’s shares, but Sumitomo Mitsui Financial Group is biting off more than it can chew in buying retail brokerage Nikko Cordial and parts of Citigroup’s Japanese investment bank.
