Good for Barclays, great from Amro shareholders, but the true victor is actually in Florida right now — with not even a ring side seat at the main event. The real hero in this deal is former Barclays Chief Executive Matthew W. Barrett, O.C.
During his time as Chairman and CEO of Bank of Montreal, Mr. Barrett tried to lead the Canadian banking fraternity in the direction of mergers, but the Liberal federal government of the day would have none of it. That was 1998, and things haven’t changed much since.
But change they did for Mr. Barrett. He left Toronto, only to wind up in his second dream job, as the new turnaround boss at Barclays. He found himself at a proud and historic bank that was largely operating in a 1950s fashion, and vowed to do something about it. He closed branches, he cut staff, he focused on mortgages. Pretty much took out his BMO playbook and picked off the best plays. And it worked.
In one memorable moment, when being quizzed by a U.K. Parliamentary committee about banking fees, Mr. Barrett was quoted as saying (as best I can recall). “We’re a business. The last time I went to Sainsburys I didn’t see the aisle marked ‘Free Food’“. That ended any further chance of effective questioning by the legislators, one can only assume.
He still had to suffer the shock at his North American-style pay package, and the “Montreal Mangler” tabloid moniker, but he knew he was on the right track.
In just a few short years, Barclays had the heft to acquire a global bank in a US$91 billion deal that is worth about 15% more than the price of acquiring BMO (C$36B), CIBC (C$33.7B) and TD Bank (C$49.4B) combined.
When asked by Businessweek about “his role in the company”, Mr. Barrett replied: “I was just the orchestra leader. The turnaround [at Barclays] was done by folks who were already here.” This quote is all the more wonderful as his father had, after all, been an Irish band leader.
In hindsight, had Mr. Barrett’s idea of merging RBC & BMO been allowed to proceed, it might be a Canadian entity that’s acquiring ABM Amro today, and not Barclays.
But, it isn’t. Instead, Canada is selling Accelio, Airborne Entertainment, Algoma, ALI, ATI, Basis100, Corel, Cybermation, Dofasco, Fairmont Hotels, Falconbridge, Gateway Casions, Geac, Inco, Intrawest, John Labatt Ltd., Masonite, MIL-Davie, Molson Breweries, Newbridge, Pixstream, Sleeman Breweries, Tarragon Oil & Gas, UE Waterheaters, Vincor and Westcoast Energy to name a few. And 40% of BCE. And a big stake in Alliance Atlantis. And….
Mr. Barrett, always a proud Canadian as well as an Officer of the Order of Canada, might be allowed an “I told you so”. But I suspect the irony speaks for itself, and for him.
Disclosure: I once worked for Mr. Barrett