Barclays to Assess Benefit of Asset-Insurance Program

Discussion in 'Wall St. News' started by ASusilovic, Mar 8, 2009.

  1. March 8 (Bloomberg) -- Barclays Plc, the third-biggest U.K. bank, will speak with British Treasury officials to determine whether its participation in a government asset-insurance program would be positive for shareholders.

    “We need to take a view as to whether the scheme will benefit our shareholders,” spokesman Alistair Smith said by telephone today. “For that, there will need to be engagement with the Treasury.”

    Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc have put loans into the plan, which is intended to protect banks against further losses and spur the economy. Barclays said in January that it wouldn’t need government funding because of “record revenue” from the London-based company’s investment- banking unit and the acquisition of Lehman Brother Holdings Inc.

    Barclays has declined 84 percent in 12 months in London trading, slashing the bank’s market value to 5.4 billion pounds ($7.6 billion).

    The bank may place assets worth as much as 60 billion pounds into the government’s insurance program, the Sunday Express reported on its Web site, without saying where it got the information. Barclays is in talks with the Treasury and has already put forward 8 billion of assets for it to consider, the newspaper said.

    Prime Minister Gordon Brown has tightened his grip on British banks since October, when he pledged 37 billion pounds to recapitalize Lloyds and RBS. Lloyds will be the fourth British bank to cede control to the government since the collapse of Northern Rock Plc in September 2007.

    The Treasury has discussed the program with all the banks, a spokesman said by telephone today. Banks have until March 31 to decide whether to join the plan, the spokesman said.

    Seems, Brown´s government preparing "tabula rasa" in U.K.