Barclays, the UK banking giant, may be pondering a change of location. And while British rivals like HSBC and Standard Chartered consider moves to Asia, it is thinking about moving in the opposite direction.A new report from UBS suggests that Barclays may be considering moving to the U.S. (via FT Alphaville).
The bank has several problems facing it in the UK:
- Regulations holding it back from issuing a competitive dividend
- It’s balance sheet is 100% of UK GDP (too big to fail for the UK government)
One solution, according to UBS analysts, is that Barclays move itself to the U.S. They explain that, as a company, it resembles JP Morgan Chase, with its mix of investment banking and traditional banking activities.
The how to of this move is where things get interesting.
From UBS (via FT Alphaville):
We recognise that simply relocating head-office would be a significant and high profile decision for Barclays. In our view, the most likely means of leaving the UK would be for Barclays to be involved in some form of corporate activity.
Barclays has already successfully taken over the remnants of a U.S. investment banking empire in Lehman Brothers, and now resides in its former offices in New York’s Midtown. It also runs a consumer credit card business in the U.S., under Barclaycard. And it has naming rights to the new Brooklyn Nets arena, the Barclays centre.
But this sort of move would require the acquisition of a retail banking outlet.
The FT cited speculation earlier this month that that could be US Bancorp, PNC Financial, or SunTrust. WSJ.com added Comerica, RBS’ U.S. retail unit Citizens Bank, parts of Citigroup, Fifth Third Bancorp, and Huntington Bancshares to the list.
What’s obvious is, little by little, Barclays is moving in on the U.S. market. Whether its willing to take the great leap of leaving Britain behind for a U.S. domicile is still unknown, but it is likly to be at the centre of banking M&A talk in future months.