As part of its efforts to expand business, Barclays PLC (BCS – Free Report) is eyeing Societe Generale’s (SCGLY – Free Report) U.K. private bank. Per a Reuters report, citing three people familiar with the matter, BCS is in the early stages of considering a bid.
On Feb 20, BCS will announce a new group strategy (aimed at streamlining its business model and generating more sustainable returns for less risk), along with its full-year results.
The bank’s move to bid for SocGen’s British private bank would complement the above-mentioned strategy.
Barclays’ interest in SCGLY’s private bank came after the British bank announced a deal to acquire Tesco’s retail banking business for £600 million. The partnership with Tesco, the U.K.’s largest retailer, not only marks a key opportunity for BCS to further its retail banking ambitions but also signifies a new chapter in expanding its customer base and distribution channels.
The Tesco deal is expected to complement Barclays UK’s existing business and strengthen its position in the market by tapping into Tesco’s extensive distribution channels and customer loyalty scheme.
According to the people familiar with the matter, SCGLY has started inviting bidders to take part in an auction for its Kleinwort Hambros unit. The unit, which had more than £12 billion in assets under management in 2022, could be worth up to £700 million in a sale.
The people with knowledge of the matter said that Lloyds Banking Group plc, Rathbones and Raymond James have been invited for the bid. However, Rathbones has opted not to participate in the process.
Notably, as SCGLY looks to shed businesses in a strategy revamp, it is preparing for a sale of its private banking operations in Switzerland.
Discussions are at a preliminary stage and there is no certainty that a deal will materialize.
Over the past three months, shares of Barclays have gained 2.4% compared with the industry’s rally of 3.5%.
Currently, BCS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Growth Efforts by Other Banks
In January, Webster Financial Corporation (WBS – Free Report) completed the acquisition of Ametros Financial Corp to broaden its financial services portfolio. Ametros, one of the country’s largest professional administrators of medical insurance claim settlements, will maintain its operations under the Ametros and CareGuard brands.
The acquisition positions WBS to tap into Ametros’ rapidly growing source of low-cost, long-duration deposits. The addition of Ametros to Webster’s offerings not only enhances its deposit diversity but also introduces a new stream of non-interest income. With plans for a full integration in the first quarter of 2024, this move reinforces the company’s commitment to strategic expansions.
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