Deal makes Barclays No1 broker

BARCLAYS BANK will become Britain's biggest private-client stockbroker following the £210m purchase of Gerrard Management Services from South African-owned Old Mutual.

The deal will almost double the funds under management with its Barclays Investment Management business - the division that over-arches its array of private client services - to £21.4bn.

However, it failed to halt a £540m slide in Barclays' shares amid reports that a long-touted suitor, the giant Bank of America, had turned its attention to Fleet-Boston Financial in an expected $47bn deal.

Early gains of 2p in Barclays shares turned into a 13p fall, leaving our third-largest bank trading at 492 3/4p with a value of £32.57bn, down from £33.11bn at Friday's close.

Barclays preferred to concentrate on its Gerrard acquisition, stating it 'advances the delivery of one of Barclays' strategic priorities, which is to build a leading UK and European wealth and asset management business'.

The deal brings Barclays an extra 116,000 new client accounts, mostly discretionary and advisory ones, and includes the old Greig Middleton stockbroking firm, which will continue to operate under the Gerrard brand.

These accounts are expected to produce much higher-margin returns than execution-only business, the vast bulk of Barclays 550,000 existing private client broker accounts.

Hasan Askari, chairman of Old Mutual Financial Services (UK) said Old Mutual will use the proceeds-from the sale to 'build up a general war chest for our UK expansion plans in either life insurance or asset management'.

Insurer Britannic and AMP's Pearl division in the UK are on Old Mutual's radar screen.