Barclays - The new BB?
Hey, with the whole merger thing happening, seems like BarCap would be pole-vaulting into the top 5 investment banking firms.
So it'd be (my guess). GS, MS, CITI, BarCap, ML, UBS, JPM..etc.
How're the London guys at ABN feeling though? with bob diamond's cold heart slashing things away?
More importantly, how does one move on if slashed in a takeover saga? Apply somewhere else or automatically get picked up by other banks?.Would be good to know.
Why? Barcap is a debt house and ABN Amro's IBanking capabilities aren't too great so it certainly wouldn't put them alongside MS or anything.
Ok, i was quoting John Varley actually, even bob diamond spoke on the same. Now i know that its quite obivious that they would trump up their firms, but at that senior level, it has credibility.
Barcap is very good in DCM and ABN is strong in Asia and Europe (m&a), plus a good JV with Rothschild in ECM.
anyways.
I would not go so far as saying that ABN is strong in M&A in Europe. I agree that Barcap is a good debt house, but it takes more than a good debt house + a third tier commercian bank going after investment banking business to go after the big boys. What will likely happen is that the jitters of corporate reorganizations will make the stars vilnerable and the likes of Morgan Stanley and Citi will poach the best guys from both banks. This is precisely how Morgan Stanley beefed up its ranks over the last 2 years and there's no reason why it won't do so again. Also, if you're an exec at either firm, the prospect of getting your comp in the shares of a commercial bank (which barclays + ABN will inevitably be) vs. a pure i-bank is a no brainer (just look at the performance of say GS and Lehman vs the commercial banks, say JPM and Citi) since 2000.
http://www.marketwatch.com/news/story/abn-amro-ceo-groenink-rbs/story.a…
City and JPM had dodgy stock performance due to the various purchases they made (Or were part of)
Never thought much of ABN in europe for m&a activity. They seem to be decent in markets - I have nothing to base that statement on though. It's just a feeling.
Barcap are an excellent debt house. Their DCM team in europe is highly thought of. They've had serious growth over the last few years. However it has been organic.
This will give them extra leverage on their balance sheet and who knows what else.
They are no BB yet but they have the potential to make it in the next 10 years. If they can work out the kinks they will be somewhere alon the lines of CS or UBS me thinks.
Barclays (ABN AMRO) Bank will definitely not be BB. Headhunter's right, ABN is far from being a top M&A advisor even in Europe.
This deal will be a bigger, maybe better retail bank and an even more impressive debt house.
Barclays management will more or less take over the new entity (key roles except for Chairman going to Barclays boys). Barclays strategy so far has been pushing hard in debt and asset management where they've seen excellent performance. ABN will bring extra balance sheet and greater access to investors/clients. ABN on the other hand tried to become more of a global bank and became unfocused, hence the troubles recently.
So I reckon they're a lot more likely to expand geographically (Eastern Europe / Asia) within their areas of expertise before starting to think about becoming a BB (which is not the end goal for all financial institutions).
A better description of Barcap is as a trading shop. The bank has clearly stated they have little interest in M&A or cash equities. But their structuring, sales, and trading is quite good. The bank is #3 in the world in commodities, and top 5 in most, if not all, other areas in S&T. And size-wise their net income is already bigger than Lehman, Bear, JPMorgan, and pretty comparable to Merrill and Citi--I'm talking net income for the investment banking divisions of each, before anyone goes and gets their panties in a twist. And Barcap has already been poaching the hell out of all the other banks. Half the commodities desk is from Goldman, and entire desks in mortgages and credit were taken from Citi a few years back. I did an internship at a BB during b-school and they were pissed at the time because Barcap basically bought one of their entire desks. I have some friends who work at Barcap now and I'm blown away by how well they've been doing.
BarCap will not be a BB in IBD in the foreseeable future.
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