Barclays: The bank that lived
Barclays was the bank that many expected to fail. Recapitalized, with its earnings power enhanced, safe from the clutches of the UK taxpayer, it may emerge as one of the big winners from the crisis. The bank’s leaders expect to build dominant positions in both retail and investment banking. What could still throw Varley, Diamond & Co off course?
It has put noses out of joint, including those of some of its shareholders. Questions linger over its bad assets. But the bank is earning its own way out of its problems and intends to profit mightily as competitors exit the field. Peter Lee reports.
MISERY LOVES COMPANY. So in the wake of the Lehman Brothers’ collapse, when first RBS and then Lloyds Banking Group were brought down by billions upon billions of pounds of credit losses and forced into majority ownership by the government, UK bankers reasoned that Barclays must soon join them.
It was extremely unlikely, they suggested, that Barclays could have avoided the worst blows of the credit crisis. And if the damage wasn’t showing up in its published results yet... well, who in their right mind would still believe any bank’s numbers? This, after all, was the same Barclays management team that nearly bought ABN Amro, only to be beaten to the worst prize in the history of banking M&A by Fred Goodwin’s RBS.