Friday, Feb. 16, 1968
A Big Three with Muscle
Prestigious, 274-year-old Barclays Bank Ltd. (deposits: $5.96 billion) has long been No. 1 in British banking. But two weeks ago, it looked as if Barclays was about to lose the title. Westminster Bank, the country's fourth largest, agreed to merge with National Provincial, the fifth largest, into a combine with total deposits of $8.3 billion (TIME, Feb. 9). Last week Barclays bid to stay on top by arranging a get-together of its own--the biggest in the history of British banking.
Barclays' prospective partners are Lloyds Bank, the country's third largest, and smaller, Liverpool-based Martins Bank. With total deposits of $11.66 billion, the new bank would not only be Britain's biggest but would rank No. 4 worldwide, behind the U.S.'s Bank of America ($19 billion), Chase Manhattan ($15.76 billion) and First National City ($15.2). And it shapes up as an even more formidable financial force when the subsidiary operations of the three partners are included; Barclays Bank, for example, holds a 51% interest in far-flung Barclays Bank D.C.O. (for Dominion, Colonial & Overseas).
Though more bank mergers had been expected, the decision of Barclays and Lloyds to join forces came as something of a surprise. For weeks, the two banks had been negotiating independently to take over Martins, with the most recent speculation in London's financial community favoring Lloyds. But at a time when British banking is trying to streamline itself to meet the international competition of U.S. banks, the larger, three-way merger made obvious economic sense. The prospective partners said in their announcement that pooling their resources would facilitate conversion to fully computerized banking as well as the elimination of "overlapping representation through a merger of branch offices."
Coming on the heels of the Westminster--National Provincial merger, the Barclays-Lloyds-Martins union will, if both are approved by the Government Monopolies Commission, reshape the traditional Big Five of British banking into a more muscular Big Three. Caught in the middle by mergers involving all four of its leading rivals is Midland Bank, which stands to slip from its present position as the country's second largest bank to a lonely third.
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