Barclays deal sparks interest in mortgages

first_imgBarclays deal sparks interest in mortgagesOn 22 Aug 2000 in Personnel Today Barclays Bank sparked fresh merger speculation in the UK banking sector last week when it acquired Woolwich, the mortgage bank. The deal, worth £5.5bn, came as no surprise especially as Barclays had been actively seeking to double its share of the UK mortgage market through strategic acquisition. The transaction received mixed reactions. Many analysts believe that the purchase of Woolwich is logical, as it would enable Barclays to achieve economies of scale in the marketing of mortgages and savings products. Others say Barclays may have paid too much for Woolwich. But the unions say the commercial advantages are at the expense of thousand of jobs, particularly in areas where the two banks’ services overlap. Barclays and Woolwich are adamant however, that any job losses would be through natural wastage. The Barclays offer made up of 0.1175 Barclays share, £1.64 cash and 4p Woolwich dividend – equivalent to £3.62 per share or 34 per cent premium – sent Woolwich share price rocketing immediately the deal was announced. Barclays’ share price fell sharply initially but it shot back up days later. The transaction is continuing to fuel speculation of further consolidation in the sector. Last week the FTSE 100 index rose thanks to banks, telecoms and oil stocks.Government may bring in curbs on fat cats’ pay awardsThe Government has hinted that rules might be introduced to counter the problem of fat cat bosses. Trade and Industry Secretary Stephen Byers is keen to assist shareholders in their efforts to curb outlandish pay awards to senior executives. One such recent case involves Vodafone Airtouch, where nearly a third of the shareholders voted against the £10m gift to the company head. Vodafone’s share price has been back-pedalling in the face of high costs of European licences and consumers’ apparent loss of appetite for the much-hyped WAP mobile telephones.last_img read more