Barclays moves forward

This Monday another big deal was announced in the UK banking sector. Barclays, one of the world's largest, agreed to acquire Scottish insurer Standard Life in a 226 million-pound transaction. The Edinburgh-based bank aimed to be one of Britain's leading institution back in 1998, during its creation. Now after eleven years it is selling its mortgage and savings arm, worth 8 million pounds, for a lower price than estimated (£300m-£400m). Barclay's move intensifies even more the sector's competition, as less and less mortgage lenders are left standing. Also, at a time of positive thinking, it marks a new step in the bank's path following its credit crisis performance, somewhat better compared to the others'.

The stock market didn't seem to be that convinced, though. Both companies' shares declined today, BARC at of rate 2.45% while SL closed down 1.5%.

As for the financial media, it's possible to say that, to some extent, the same applied. I've read this story on the Guardian, The Times, the FT and the Herald Scotland. In general, the first ones published a similar format of article, which was not as gentle as the last two. Considering the information given, however, they basically showed the same type data.

The Scottish paper focused mostly on the financial aspects of the transaction. In short paragraphs and sentences it revealed the reason (according to SL CEO's Sir Sandy Crombie, new objectives in the long-run) and aims (of a mutual cooperation) behind the deal. Also, it reminded us in a quick passage about the employee's destiny as the transaction takes place. Contrary to what I firstly thought, it wasn't really a Scottish-oriented article. Apart from publishing SL's headquarter in Edinburgh, it was pretty neutral to me.

In contrast, the Guardian and The Times seemed a little bit too sensationalist in my opinion. The Times, especially, right from the headline opted for a more shocking than informative one. As both articles went by, their writing style was comparably alike. Either interpreted the story as a sad end to Standard Life, reacting extensively critical about the transaction, in a way that gave me the feeling that it shouldn't have been done, or at least that it wasn't indeed something expected. The use of the expression "to throw in the towel" by the two editors possibly summarises my view on the articles - in meaning as well as in originality. Besides, information divergence left me in doubt whether SL had ten or eleven years of establishment.

Finally, the Financial Times gave me a rather clear view of the agreement. Differently to the ones mentioned above, it didn't emphasise the fact that SL was giving up on its ambitions and so forth. Its correspondent paid more attention to the surrounding facts of those institutions and the banking sector itself, including a reference to Barclays recent history of coping with the crisis.

Therefore, this was an interesting story to me, because it is reflecting the current stage of the world financial crisis, of new perspectives and an increasingly agitated competition. After this Standard Life deal, Barclays moves forward after a likely successful management throughout the late turbulent times. Thus, my own view differs from that of The Times and the Guardian, because I believe them both will benefit from that by working together as a rather concrete financial institution in the UK (and world) market, which can feasibly draw substantial changes in the sector, in next to no time.

The Guardian:
http://www.guardian.co.uk/business/2009/oct/26/standard-life-bank-barclays

The Times:
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6891211.ece

Financial Times:
http://www.ft.com/cms/s/0/857a78e2-c27a-11de-be3a-00144feab49a.html

Herald Scotland:
http://www.heraldscotland.com/news/home-news/barclays-agrees-to-buy-standard-life-bank-1.928653