Tuesday 19 May 2009 8:00 pm

BarCap hires fierce critic

BARCLAYS Capital (BarCap) is to hire a trio of Citigroup analysts, including one with a record of issuing notoriously bearish notes on the investment bank’s parent company, as it marches on with its hiring spree.

Tom Rayner, a banking analyst with Citigroup, will join BarCap’s European equity research team, in a move that will raise eyebrows given some of his previous comments on the group.

In October 2007, Rayner criticised Barclays for failing in its bid to buy ABN Amro, the Dutch bank that later brought Royal Bank of Scotland to its knees.

“We have consistently argued that an over-reliance on Barclays Capital represented a risk for Barclays’ earnings outlook,” Rayner said at the time, in a note to clients.

Just a few months later, in spring 2008, he said the bank was “in denial” over the scale of writedowns, given its portfolio of troubled assets.

Later that year he was similarly pessimistic about the bank’s prospects, predicting “significant writedowns”.

However, the appointment is not that surprising in the context of Barclays’ history with independent thinking analysts.

Terry Smith, now chairman of Tullett Prebon and Collins Stewart, won fame while at Barclays’ former investment banking division BZW, issuing a “Sell” note on the bank, which he said “could not lend money without losing it”. The controversy over this helped make Smith’s name.

Rayner will be joined by Citigroup colleagues Simon Samuels and Jeremy Sigee, BarCap is set to announce in the coming days.

RAYNER ON BARCLAYS

Barclays (BARC.L)
“We have consistently argued that an over-reliance on Barclays Capital represented a risk for Barclays’ earnings outlook” – October 2008

“With credit market conditions continuing to deteriorate globally, we believe it is simply a matter of time before further significant writedowns are taken.” – June 2008

“Although structured credit losses (are) as guided and are expected to improve in 2009, a significant deterioration in bad debts is anticipated.” – February 2009

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