Barclays May Set Up Bad Bank For Weak Assets, Analysts Say

[headrow]

http://www.cityam.com/news-and-analysis/barclays-may-set-bad-bank-weak-assets-analysts-say

BARCLAYS could soon start a radical restructuring to spin out a “bad” investment bank to wind down poorly performing assets, analysts said yesterday.

Shedding non-core and credit-impaired assets by repackaging them into a separate entity would allow it to meet its looming Basel III capital requirements while maintaining high earnings and dividends to shareholders.

Barclays is likely to announce the decision alongside its full-year results in February under new chief executive Bob Diamond, UBS analysts led by Philip Finch said.

“The clearest way for Bob Diamond to stamp his authority upon the group, in our opinion, is to initiate a restructuring at Barclays to exit low-return assets and businesses and deliver a higher return bank with a smaller balance sheet,” they said.

Such a “work-out bank” could include up to £200bn of non-performing mortgages, parts of Barclays Capital or some of its stake in asset manager BlackRock. Barclays would follow Northern Rock, Royal Bank of Scotland and Lloyds Banking Group, all of which have created run-off entities following the credit crunch.

£200bn in non performing mortgages?

[Mikhail Liebenstein]

http://www.cityam.co...ts-analysts-say

BARCLAYS could soon start a radical restructuring to spin out a "bad" investment bank to wind down poorly performing assets, analysts said yesterday.

Shedding non-core and credit-impaired assets by repackaging them into a separate entity would allow it to meet its looming Basel III capital requirements while maintaining high earnings and dividends to shareholders.

Barclays is likely to announce the decision alongside its full-year results in February under new chief executive Bob Diamond, UBS analysts led by Philip Finch said.

"The clearest way for Bob Diamond to stamp his authority upon the group, in our opinion, is to initiate a restructuring at Barclays to exit low-return assets and businesses and deliver a higher return bank with a smaller balance sheet," they said.

Such a "work-out bank" could include up to £200bn of non-performing mortgages, parts of Barclays Capital or some of its stake in asset manager BlackRock. Barclays would follow Northern Rock, Royal Bank of Scotland and Lloyds Banking Group, all of which have created run-off entities following the credit crunch.

£200bn in non performing mortgages?

I personally don't think this should be approved. Instead the regulators should break Barclays into 10 pieces each with their own share of the turds.

[@contradevian]

I personally don't think this should be approved. Instead the regulators should break Barclays into 10 pieces each with their own share of the turds.

+1

But Barclays run the regulators and the government so not going to happen. I'm only surprised Merv hasn't hoovered all this up. and given them some nice guilts to play with instead. Trebles all round!

[MrFlibble]

I personally don't think this should be approved. Instead the regulators should break Barclays into 10 pieces each with their own share of the turds.

Brilliant comment

[fluffy666]

http://www.cityam.com/news-and-analysis/barclays-may-set-bad-bank-weak-assets-analysts-say

BARCLAYS could soon start a radical restructuring to spin out a “bad” investment bank to wind down poorly performing assets, analysts said yesterday.£200bn in non performing mortgages?

I thought Barclays was a clever bank that had avoided TS when it hit TF. Not just kicking the can down the road..

[leicestersq]

I thought Barclays was a clever bank that had avoided TS when it hit TF. Not just kicking the can down the road..

I thought Barclays were one of the big borrowers from the Fed when it all went Pete Tong, so they clearly had problems. I have little doubt that they also borrowed lots and lots from our own BofE, and the ECB.

Barclays dont need to divide themselves up if their desire is to create a bad bank.

I am also intrigued how they think that by splitting themselves up, they can make themselves more profitable. You cant just create an entity with no capital and a lot of liabilities, that is fraudulent conveyance.

Then again, the threat of being prosecuted for fraud hasnt deterred any bankers from much lately.

[Sour Mash]

Gotta love the way that banks get to create a 'bad bank' with all the liabilities that they have when those liabilities mean that they are insolvent ... can shops create a 'bad shop' instead of going bankrupt? How about factories creating a 'bad factory' when their business has crashed?

The banking system is a joke and it's destroying the credibility of currency by allowing it to operate the way that it does. It's pretty clear now that the authorities will push the entire system into a crash rather than make the banks swallow their own losses.

[General Congreve]

£200bn in non performing mortgages?

These useless c4nts and the rest of the pathetic excuses for banks should be made to swallow their losses, then we'll have our house price crash alright. :angry:

I got my cash out of the insolvent tw@ts ages ago, so I'm ready for a total bank collapse, bring it!

Edited January 11, 2011 by General Congreve

[General Congreve]

Gotta love the way that banks get to create a 'bad bank' with all the liabilities that they have when those liabilities mean that they are insolvent ... can shops create a 'bad shop' instead of going bankrupt? How about factories creating a 'bad factory' when their business has crashed?

The banking system is a joke and it's destroying the credibility of currency by allowing it to operate the way that it does. It's pretty clear now that the authorities will push the entire system into a crash rather than make the banks swallow their own losses.

Yep, they'll push the lot over the edge. Seems a few on here don't realise it though, despite being warned, many a time.

[Democorruptcy]

Just shows how completely useless Basel III capital requirements are. The capital they will have is the required percentage of only "performing" assets instead of their overall balance sheet.

No doubt taxpayers can look forward to a future bailout of the bad bank while the bankers keep raking in bonuses based on profits from the good bank. Any investment that goes wrong just stick it in the bad bank. Any investment they make really is a free bet - keep the profits but ignore the losses.

[fluffy666]

Gotta love the way that banks get to create a 'bad bank' with all the liabilities that they have when those liabilities mean that they are insolvent ... can shops create a 'bad shop' instead of going bankrupt? How about factories creating a 'bad factory' when their business has crashed?

The banking system is a joke and it's destroying the credibility of currency by allowing it to operate the way that it does. It's pretty clear now that the authorities will push the entire system into a crash rather than make the banks swallow their own losses.

Hey, I'm going to create two sets of bank accounts. 'Bad Fluffy' and 'Good Fluffy'. 'Bad Fluffy' will have the mortgage, CCs and as many loans as I can raise, 'Good Fluffy' will have the house, savings and current account. Then can I have Bad Fluffy go bankrupt..

[Djini]

I'm going to set up two PLCs. The first will be used to get a big credit line and used to order all my stock that I'll sell at a HUGE loss to my other PLC.

That other PLC which bought everything so cheap will then sell at prices that will beat all competition and award my savvy self with a huge bonus because of the vast profits I made.

I'll then bankrupt PLC 1.

[leicestersq]

Hey, I'm going to create two sets of bank accounts. 'Bad Fluffy' and 'Good Fluffy'. 'Bad Fluffy' will have the mortgage, CCs and as many loans as I can raise, 'Good Fluffy' will have the house, savings and current account. Then can I have Bad Fluffy go bankrupt..

Fraudulent Conveyance.

[leicestersq]

I'm going to set up two PLCs. The first will be used to get a big credit line and used to order all my stock that I'll sell at a HUGE loss to my other PLC.

That other PLC which bought everything so cheap will then sell at prices that will beat all competition and award my savvy self with a huge bonus because of the vast profits I made.

I'll then bankrupt PLC 1.

Fraudulent Conveyance.

[fluffy666]

Fraudulent Conveyance.

Haw about I hand over a wedge of cash for a dinner table seat with Mr Cameron at a fundraiser? Isn't there something in the conveyancing laws about that?

[Bloo Loo]

There is no subprime in the UK

[fluffy666]

There is no subprime in the UK

Corrected.

[Democorruptcy]

Live blog of Bob Diamond facing the Treasury Select Committee.

"We never took a single penny from any taxpayer around the world"

http://blogs.ft.com/westminster/2011/01/bob-diamond-at-treasury-select-committee/?ftcamp=rss

[@contradevian]

Live blog of Bob Diamond facing the Treasury Select Committee.

"We never took a single penny from any taxpayer around the world"

http://blogs.ft.com/...tee/?ftcamp=rss

Maybe they should because it appears Barclays are bust, and a lot of it is Diamonds, BarCap stuff. Still he's worth a multi million bonus I suppose as he's very talented! Just remember we are all in this together! I can also remember Barclays leaked documents revealing all their tax evasion strategies too.

[Democorruptcy]

Live link:

http://www.parliamentlive.tv/Main/Player.aspx?meetingId=7376

[yellerkat]

Grauniad live blog:

10:30 They [the government] recognises that

there was a period of remorse and apologising from banks

," Diamond said.

Do you remember the remorse?

No, me neither.

[@contradevian]

Grauniad live blog:

10:30 They [the government] recognises that

there was a period of remorse and apologising from banks

," Diamond said.

Do you remember the remorse?

No, me neither.

Yes I do, they were hauled before a Parliamentary Select Committee and forced to apologise on live TV. Fred the Shred collected his pension and the BBC told us to "draw a line under this" as the bankers had apologised. Then it was business as usual.

[leicestersq]

Yes I do, they were hauled before a Parliamentary Select Committee and forced to apologise on live TV. Fred the Shred collected his pension and the BBC told us to "draw a line under this" as the bankers had apologised. Then it was business as usual.

I am more than happy to apologise and be remorseful for anything in return for £ 1/2 million per year pension at someone else's expense.