Barclays will next week announce the creation of a bad bank in a bid to transform its struggling investment banking operations, the Financial Times reports.
The move to exit parts of its shrinking fixed income business and its loss-making European branch network will be announced as part of next week’s strategic update to investors, the FT said.
The internal bad bank will be run by Eric Bommensath, the co-head of its investment bank.
However, Barclays was dealt a blow yesterday with the departure of Skip McGee, head of Barclays Americas.
According to the FT, there are fears that Mr McGee’s departure will trigger an exodus of bankers acquired when the UK bank took over Lehman Brothers’ US operations during the financial crisis.
Co-op’s ‘sorry story’ due to Britannia
A scathing report has found poor management, bad lending, a flawed culture and an “over-ambitious drive for growth” contributed to the problems at the Co-operative Bank, according to the Guardian.
The 152 page report, which cost £4.4m, concludes that the roots of its “sorry story” lie in its tie-up with Britannia Building Society five years ago.
Concluding that the landmark merger with Britannia in 2009 should probably not have taken place, Sir Christopher Kelly, a former civil servant, also expresses surprise that the Co-op Bank attempted to take over 632 branches being sold by Lloyds Banking Group.
Sir Christopher makes it clear in his report that former and some current board members of both the Co-op Group and Co-op Bank need to take responsibility for the bank’s problems.
Saga set for £550m IPO
Insurance group Saga has confirmed its intention to raise £550m in an initial public offering, according to the Financial Times.
The float, expected in the next month, is set to give the group an enterprise value of £3bn.
The London listing will mark a long-awaited exit for the company’s private equity backers Permira, CVC Capital and Charterhouse and follows a succession of European IPOs backed by buyout groups – such as French caterer Elior and online travel agent eDreams Odigeo, which owns the Opodo brand.
Scottish independence will trigger mass exodus
According to the Telegraph, Scottish households will see a double-digit decline in living standards if the country votes to become independent, “as secession triggers a mass exodus of the financial services industry”.
Think-tank The Centre for Economics and Business Research calculated that independence would lead to a third of jobs in the financial services sector being moved south of the border.
In a speech tonight, Douglas McWilliams, CEBR founder, is expected to say that between 20,000 and 40,000 jobs will move to England if Scotland breaks away, as many of them depend on customers in the rest of the UK.
