Tuesday, August 14, 2012

Could this be the first big bank to be broken up?




Barclays, the U.K. bank fined a record amount for rigging global interest rates, is languishing at a cheaper valuation than 93 percent of its global competitors, fueling a debate about breaking up Britain’s second-biggest lender, the good folks at Bloomberg tell us.

The shares trade at a 59 percent discount to book value, implying investors don’t agree that the bank’s holdings are worth as much as the London-based company says. That’s a lower price-to-book ratio than 141 financial firms listed in the 152- company Bloomberg World Banks Index, according to data compiled by Bloomberg. While Liberum Capital Ltd. says one hurdle to a breakup may be the investment bank’s ability to fund itself, Canaccord Financial Inc. says splitting up Barclays may almost double its market value of 22 billion pounds ($35 billion)…..

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