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Barclays gets ready for retail banking split should Government insist

June 13, 2011‐ London, UK

The British banking and business media are abuzz today with news that Barclays is in advanced stage of its preparations to be ready for a split of its retail banking assets, should the Government regulators insist.

All eyes are now on the independent report that the Independent Commission on Banking (ICB) will release. The original intention of constituting ICB is to ‘investigate the complex issue of separating retail and investment banking in a sustainable way’. It is likely that the ICB orders the ring-fencing of British depositors' money. The retail banking operations thus would be carried out by a separate subsidiary within a wider group.

The idea of the regulators in insisting the separation of retail banking is that they want the retail assets of the banks be flexible and easy to be taken over or be controlled or managed by the Government, should the bank needs to step in when the bank enters into some sort of crisis.

Media reports says that Barclays has setup a team of 30 staffers who have spent months together drawing employment contracts for retail branch staff. They also assessed the leases of all the bank's UK branches so that they can begin the legal work necessary to transfer them to a new operating company.

Barclays is now in advanced stages and is a push button away from splitting the retail and investment divisions of the bank, should the Government insist for the same.

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