Thursday, 7 August 2008
Are Barclay's playing the hiding game?
I have no info but am surprised, as are most analysts (of which I am not btw), that barclays is able to declare all its nasty leveraged loans as non-toxic and requiring minimal write-down. In addition its UK write-downs on cards etc are very low.
My hunch, based on instinct and no data, is that there is some arbitrage going on here. Whilst Barclay's maintains this position it can borrow and lend in better circumstances than its UK rivals, HBOS and RBS. As such it is hoovering up mortgage share of the market by way of example.
If and when it 'comes' clean, then it will have bolstered itself at a time when the opposition was caught low. This is a dangerous game if that is what is being played.
Otherwise they are just really lucky the ego's of their management team last year lost out to RBS, sparing shareholders the denoument of acquiring ABN and then writing off most of its value within months....