Barclays spin-off a nonstarter

The idea briefly took hold that Barclays (Barclays news), the powerhouse U.K. bank, would be wise to spin off its U.S.-based investment bank and wealth management unit--essentially leaving a retail bank--as a way to boost the stock price. The idea was floated by an analyst and generated some press. But it looks to be a nonstarter.

Barclays executives do not seem to be taking the idea seriously, noting that they are sticking with the universal banking model (for better or worse). But Bloomberg also notes that the plan may be unworkable given the capital requirements. It would need to raise $4.5 billion to separately capitalize its investment bank if it chose to break up the company in order to meet Basel III requirements. That might require the sale of its nearly 20 percent stake on Blackrock, an investment the bank would rather keep. Blackrock's share price is down significantly and the dividend income would be sorely missed.

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- here's the article

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