Barclays, BNP Paribas eye Lehman's India assets

Barclays and BNP Paribas are considering the acquisition of Lehman Brothers' investment banking and brokerage businesses in India.

In the US, Barclays has already announced plans to acquire all or part of the North American investment banking and trading options of Lehman, including its headquarters in New York.

Lehman, till Monday the fourth largest investment bank and the oldest bank in the US, had filed for a bankruptcy under Chapter 11 after talks of a possible buyout with various banks failed and it reported its biggest quarterly loss.

In India, Barclays is involved in private banking and in selling structured products to companies. BNP Paribas has a mutual fund business and a stock-broking tie-up with south India-based Geojit Securities.

Both banks have been looking for investment banking opportunities in India. The Lehman buy would provide them with ready institutional and investment banking desks plus regulatory clearances.

Investment banking sources said the fact that Lehman has a licence to operate a non-banking financial company with ready assets and is sitting on a capital of over $500 million makes its Indian investment banking and brokerage business "a sort of a jewel".

Lehman also acquired the institutional broking business of BRIC Securities last year for over Rs 100 crore, which could enhance its worth.

When contacted, the Indian office of Barclays said, “We would not like to reveal our plans at this stage.”

Officials of BNP Paribas could not reached for comment despite repeated attempts. However, sources said BNP has been looking at entering the investment banking business in India for some time now.

Lehman’s investment banking and brokerage offices in Mumbai are still working, unlike the bank’s back office operations, which have been asked to shut operations.

Last year, Lehman had ramped up the strength of its investment banking and brokerage team in India to 175. The bank had also made some big investments last year including putting $200 million in the DLF promoter group company DLF Assets.

The bank also invested $175 million in Delhi-based real estate company Unitech’s Mumbai project and in several other south-based companies.

An investment banker said the skill set of the employees of Lehman's investment banking and brokerage businesses is an additional draw. "After all it's an opportunity to get top talent on your terms," he said.