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Barclays was growing faster than RBS

Ben Chu

The name Barclays crops up rather a lot in the Financial Services Authority’s inquest into the meltdown at the Royal Bank of Scotland. That’s because the two banks were engaged in a bidding war for the Dutch bank ABN AMRO. It was that purchase that sank RBS. If Barclays had won the war, it would have probably have been terminally damaged too. We should remember that fact whenever a Barclays executive tells us, as they are wont to do, that they came through the 2008 crisis without needing to take taxpayers’ money.

There’s also a telling chart in the FSA report which shows how fast the UK’s large banks were growing in the years 2004-07. RBS was expanding rapidly under the reckless stewardship of Sir Fred Goodwin, even excluding the ABN purchase. But there was another large UK bank that was growing even quicker. Yes, you guessed right, it was Barclays.

Graph1 Barclays was growing faster than RBS

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  • Laars

    Yes… But Barclays pulled out when the price got too high. So it never spent money it couldn’t afford because it thought it was a bad deal. Unlike Fred…

  • http://previousdenial.wordpress.com/ previousdenial

    Barclays went on to bid for Lehman Brothers the day before Lehman Brothers was declared bankrupt.

  • guido.fawkes

    Haven’t checked but think you’ll find that asset growth was largely due to Barclays Global Investors which it sold astutely in 2009 to BlackRock for some $13 billion. BGI was a business it grew in two decades to be the largest fund manager in the world.

    Good, not reckless business.

  • JDSixsmith

    Barclays may not have taken money from the UK taxpayer for recapitalisation but it’s totally disingenuous to say it did not benefit from it – it saved all the other banks so Barclays wasn’t caught as a domino holding some of their debts. I seem to remember they borrowed money from Qatar for their own recapitalisation… so they have to pay it back by draining money from the UK economy in a time of recession.
     
    It was speculated that the reason Barclays refused a bailout from the UK government because it didn’t want the govnmt to have any leverage on how much they wished to pay out in bonuses.
     
    Good old Barclays, would never putting their own interests ahead of the interests of the entire country.
     
    I also seem to remember a campaign back in the 80s to boycott Barclays for their support for the South African apartheid regime? Good to know they’re still so consistent with their morality.

  • cynicalm

    Barclays perhaps was not bailed out by the taxpayer but it now is lrgely owned by the Gulf states. A plague on all their houses!

  • Laars

    And didn’t buy it either?
    I’m not defending Barclays (I don’t and wouldn’t bank with them) but you can’t blame them for others doing what they decided no to do. And Barclays would have bought all of ABN Amro, not just the toxic bits that RBS stumped up for but also the bits that wily old Santander acquired, some of which they sold off for an immediate profit much to RBS’s disgust. Fortis got the rest but they were idiots and made a pig’s ear of it..

  • chairmanchand123

    Barclays is very lucky to have survived at all! An ABN Amro takeover would have been a catastrophe. But it is wrong for Barclays to claim it survived without State Aid. The Uk has pumped Trillions into the SLS / CGS/ QE initiatives not to mention the very low Central Bank rate. Equally Barclays relied heavily on FED Reserve support particularly the $12 Billion gained from the dollar for dollar bail out of AIG! If we add in the massive injections of Capital from the Middle East, Singapore, China AND the UK shareholders the results are scary. Where has all this “help” gone? Its paid for a doubling of REMUNERATION for failure, massive write offs of over £20 Billion, and a 90% reduction in dividends! Barclays Board should have resigned three years ago. The shares at £1.80 compare with £7.49 pre crisis DESPITE £20 Billion of capital provided by investors!!

  • http://previousdenial.wordpress.com/ previousdenial

    According to the ‘Inside Job’ documentary, the British government blocked the Lehman Brothers takeover until they got a guarantee from the US.  To avoid this Lehman Brothers declared bankruptcy as a legal tactic, without realising that this would immediately close their British branch. 

    So Barclays were saved by a rare act of common sense by the British government, which unfortunately didn’t ask the Netherlands government for a similar guarantee which would’ve saved RBS.

  • http://twitter.com/BenChu_ Ben Chu

    Barclays wrote down $22.9bn in the bust, wiping out 56% of its common equity. See table 4 in this by Andy Haldane: 

    http://www.bankofengland.co.uk/publications/speeches/2010/speech442.pdf

    The bank was reckless alright.

  • netneurosis

    Typical Independent article, long on left wing propaganda and short on facts. 

    The Barclays deal was not the same as that of RBS. Barclays offered an all share deal which importantly did not include the US subprime business, and instead went for the first of line yield returning elements.


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