Page 11 - RBS TG

Issue 3

The loss of the bid had been both good and bad news for

Barclays. On the one hand it cut short the growth it hoped

to achieve through the acquisition, including in emerging

markets such as Brazil. The very public airing of differences

between shareholders and management had also hurt the

reputation of Barclays' Chief Executive John Varley.

Barclays in having to walk away just clutching a cheque for

the break up fee, may find this a blessing in disguise. If Mr

Varley had some thinking to do about his vision for the bank

without ABN, at least he, unlike Sir Fred, would be able to do

so without any pins in his eyes.

Of greater significance to Barclays' future was its deal with

China Development Bank and Temasek, which manages the

Singapore government's investment fund. By investing in

the British bank they provided the ammunition that allowed

Barclays to sweeten its offer for ABN. The Chinese, in

particular, gave Barclays an inroad to emerging markets.