Barclays Global Investments could be sold on Monday
Rumours are circulating in the city that Barclays bank has agreed an £8 billion sale of its fund management division Barclays Global Investments (BGI) to American outfit BlackRock. This is a deal which has the potential to release windfall payments of $585 million for BGI staff who have been building up their stakes in the business for some time. This will also relieve the pressure on Barclays bank with regards to its finances and finally put an end to constant suggestions that all UK banks are struggling to support their balance sheets.
This deal has been ongoing for some time and despite suggestions it may be delayed, it looks as though Barclays bank could receive a significant cash windfall as well as a 20% stake in the new operation. It is estimated that Bob Diamond, the president of Barclays and chief executive of Barclays capital, will be in line for a $29.5 million windfall himself.
While this is definitely a good deal for Barclays bank and its shareholders, it will reignite the old argument about massive bonus payments and remuneration for those at the top end of the UK banking sector. At a time when the UK economy is struggling we could see hundreds of millions of dollars handed over to staff at the top end of Barclays Global International.
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