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Will Barclays Merge with Standard Chartered?

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Barclays and Standard Chartered have talked about the potential advantages of a merger.

So far, no deal of that nature has been made and no official statements have been released.

Will Rivals Merge?

Barclays has been in discussions with a rival bank, Standard Charter.  According to unofficial reports, they have been discussing the topic of a potential merger.  That said, as of yet there has been neither a formal nor informal bid on the subject.  This, according to a Financial Times report in which two anonymous sources were cited.

No Comment

That said, when contacted for a statement, Barclays has chosen not to comment. Interestingly, Reuters also spoke with two unnamed sources close to the bank.  That news giant’s sources stated that there wasn’t any truth to the merger rumor and that Barclays was not looking into any potential mergers with rival banks.

Standard Charter released a statement which said only that it is “entirely focused on executing our strategy, and [does] not comment on this type of speculation.”

The Financial Times Report

Within the FT’s report, it stated that a director from both Barclays and Stanchart met to discuss the potential advantages of a merger.

Barclays chairman John McFarlane thought positively on the idea of merging with Standard Charter, at least as a concept, said the Financial Times.  This idea was also supported by the Barclays International Unit chair, Sir Gerry Grimstone, the FT continued.

They quoted a senior banker as saying that, in terms of a possible merger: “John [McFarlane] has a real affinity for Standard Chartered.” The other FT source said “It would be logical but I’d be very surprised if anything came of it.”

Contingency Plans

The discussion was a component of a broader effort at Barclays for enhancing its financial performance, continued the report.

Sherborne, an activist investor, has recently taken aim at Barclays, driving the bank to reduce the size of its investment banking unit, which has been underperforming, reported Reuters earlier this month.

Edward Bramson’s activist investor fund currently holds a 5.4 percent stake in Barclays, making it one of the British lender’s largest shareholders. The FT report stated that the merger discussions were a part of a contingency plan following Sherborne’s pressure, in which senior board members are considering a spectrum of different possibilities.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.

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