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Abu Dhabi, UAEFriday 21 September 2018

Standard Chartered and Barclays said to deny report of merger talks

UK lender hasn’t held discussions with Standard Chartered and the British bank isn’t actively pursuing a deal, sources say, after FT report of possible deal

Logo of Barclays at one of its branches. Standard Chartered and the British bank are not actively pursuing a deal, sources say, despite an FT report suggesting the contrary. Sergio Perez/Reuters
Logo of Barclays at one of its branches. Standard Chartered and the British bank are not actively pursuing a deal, sources say, despite an FT report suggesting the contrary. Sergio Perez/Reuters

Standard Chartered said it’s focused on its strategy and isn’t responding to “speculation” in a newspaper report that Barclays has been exploring a potential merger with the emerging markets lender.

Barclays hasn’t held discussions with Standard Chartered and the British bank isn’t actively pursuing a deal, a person familiar with the company’s thinking told Bloomberg.

Barclays’s directors have been considering “hypothetical combinations” with lenders including Deutsche Bank, Credit Suisse and DBS, the Financial Times reported Wednesday, citing unidentified people close to the matter. The plans are part of contingency arrangements after the bank was targeted by activist investor Edward Bramson, the report said. He may urge the firm to cut back its investment bank and return more capital to shareholders, the newspaper said.

“We are entirely focused on executing our strategy, and do not comment on this type of speculation,” Standard Chartered said following the report.

Two sources close to Barclays told Reuters on Wednesday no deal was in the works and Barclays had no plans to combine its operations with any of its rivals.

Mr Bramson's fund Sherborne Investors has called on Barclays to end the bulk of trading activities at its investment bank, in a radical plan to cut costs and boost returns at the British lender, three sources familiar with the matter have told Reuters.

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Barclays shares were little changed at 8:20am in London, while Standard Chartered traded up 1.8 per cent.

The FT cited an unnamed person who knows Mr Bramson as saying he’s likely to call for Barclays to return to shareholders much of the £25 billion (Dh122.86bn) of capital tied up in its corporate and investment banking division by shrinking the unit, according to Bloomberg.

A potential takeover of Standard Chartered would bring together the transatlantic focus of Barclays in the UK and US with Standard Chartered’s concentration on Asia, the Middle East and Africa.

It would mark a sharp reversal in Barclays chief Jes Staley’s public strategy for the bank, which has sold down its holdings in Africa under his tenure. Last month, Mr Staley also reiterated a pledge to return an increasing amount of cash to shareholders through dividends and buybacks.

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