But becoming chief executive of Barclays is not an ordinary promotion. I’ve always viewed the post as one of those British establishment jobs, such as director-general of the BBC, or head of the Post Office. Everything you do will be watched, analysed and commented on. You had better be prepared, have a plan, and be lucky, or it could be a rough ride in full view of the public.
On top of that pressure, Varley is assuming the mantle at a time of big change in Britain’s banking market. Banco Santander Central Hispano is keen to buy Abbey National, but HBOS has emerged as a possible bidder, disrupting the Spanish bank’s plans. And while James Crosby, HBOS’s chief executive, has yet to put his money where his mouth is, he is having a wonderful phoney war. Each day seems to bring another BSCH-bashing story, playing right into the hands of the Scottish bank.
For Barclays, Varley must be thinking that while competing with the Spanish bank in Britain would be tricky — it has a formidable reputation in Spain, where Barclays has a presence — it would be preferable to an HBOS-Abbey link-up. As John Waples and Louise Armitstead point out on page 9, such a combination would have more than one-third of the mortgage market, one-quarter of the savings market, and 40m customers.
Surely, you would think, HBOS will face a long competition inquiry. But perhaps not. The Scottish lobby is a powerful one in Whitehall, and it is an interesting coincidence that the last two big banking deals in Britain have been by banks committed to retaining Scotland as their home base.
There has to be some reason for HBOS’s delay in logging its bid with the Office of Fair Trading. Crosby has said he will wait until BSCH publishes its offer document next month before deciding how and when to bid, pushing back any possible completion of an HBOS-Abbey deal even further — if a full Competition Commission inquiry is demanded.
Advertisement
Nevertheless, we should presume that Barclays does not view a Crosby victory for Abbey as a big business problem. I am told that Varley has other ideas about the future size and shape of Barclays that an HBOS-Abbey tie-up would not disrupt.
Within five years, up to half of the bank’s earnings could be coming from outside the UK. That represents a big increase on the current position, and will come about primarily through aggressively growing its three globalising businesses — fund management, credit cards and investment banking. Some of this will be achieved through piecemeal acquisitions (it bought a small credit-card business last week), but much will be through organic growth.
So the UK will remain of crucial importance, but under Varley you can expect more planting of the Barclays flag round the globe. And as for the bank losing its independence, well, you never say never, but I get the strong impression that five years from now Barclays will still be just that. Barclays.
A letter to the FSA
Advertisement
WHY should we be sending the Financial Services Authority copies of documents sent to us anonymously about James Middleweek, the former Collins Stewart analyst? After all, as financial journalists, we are not regulated by the FSA (thank goodness), and we do not want to give its power-hungry officials any chance to change that.
And boy, are the FSA keen to get their mitts on us. The Interbrew saga proved that beyond any doubt. Several newspapers that had been sent a document anonymously detailing the Belgian group’s takeover aspirations found themselves under attack from the regulator. Thankfully, the newspapers fought it, and the company and the FSA backed off. But after it was over I had an ominous conversation with one of the FSA’s junior officials that concluded with him saying: “It will only be a matter of time until you’re one of ours.”
Which takes us back to Middleweek. Several weeks ago, a bunch of documents, comprising mainly e-mails, was sent to us. Put together, it is a strange collection of information, but at the centre is an extraordinary allegation: that Middleweek ran an extensive share-dealing ring, pushing out tips on which stocks to buy and when to a network of friends and family.
It has been our duty to check out the report, even though we have no idea who sent it to us, or their motive. Our reporters have worked hard to come to a judgment, but it has proved largely impossible.
Advertisement
We (sadly) do not have police powers, and therefore cannot compel Microsoft to turn over all details of jmiddleweek@hotmail.com. Middleweek said he has never set up such an account, and never used it to send e-mails. The FSA does have powers akin to those of the police, and should be able to get to the bottom of this case reasonably quickly.
With the dossier we sent to the FSA was a letter signed by me. It stated: “In line with our normal procedures, we have destroyed the originals, the wrapping they came in, and any notes we made during the course of our investigation of the documents. It is for you at the FSA to decide what you do with the documents, but, of course, as independent journalists we will be unable to co-operate formally with any FSA probe. I hope you understand and respect our reasons for that.”
Oddly foreign
Advertisement
WHAT an extraordinary place France is. For large parts of the day, the place appears simply to shut down. In fact, I would say that it is shut more than it is open. And when it is open, it is very, very French. Walk round a supermarket, and it is all, well, French. There is a good choice of bottled water, but it is all French. Ditto butter, ditto just about anything on sale.
But then you get to the amusing bit. Via Ryanair, France is now full of British people, walking round, spending money on second homes, and trying to buy things in the shops. I know this because each day for the past two weeks I pottered into the local boulangerie and had the following conversation:
Me: Bonjour Madame. Je voudrais des pains au chocolat, s’il vous plait.
Woman behind counter: Il n’y en a plus. Les Anglais ont tous acheté.
Me: Pourquoi pas faire des autres?
Advertisement
Her: Parce que nous ne voulons pas.