On the day that Barclays felt the full brunt of allegations about its so-called “dark pools” from a New York attorney general, its corporate finance arm in Europe was reporting a significant success. The London Stock Exchange (LSE) announced a merger deal and with it a near £1bn rights issue, solely underwritten by Barclays.
This kind of deal would have been the stuff of dreams for former Barclays chief executive Bob Diamond, who saw no reason why the UK part of the bank could not join the European big boys in acting on some of the world’s largest M&A and equity capital deals.
Barclays’ success in winning the LSE mandate, plus its advisory role in the TUI Travel merger, shows how far it has come in a relatively short space of time.
The bank, for many years a minnow in this business, has acted on various new issues such as Intelligent Energy, Merlin and Infinis, and gained a significant numbers of brokerships.
However, the fear must be that the investment bankers at Barclays become demoralised by the general noise around the bank. The Libor scandal, the row over bonuses and now the allegations over dark pools must make it hard to maintain morale. Chief executive Antony Jenkins has been reluctant to talk this part of the bank up, preferring instead to highlight other areas, especially in the group’s retail banking side. Some love is needed, and soon, to prevent the UK’s top investment bank from falling away, allowing the US titans to dominate corporate transactions in Europe once again.