UBS Analysts Suggest Barclays Will Relocate to the U.S.

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Analysts at UBS have stirred things up in London: They're suggesting that Barclays could improve its shareholder value by relocating its headquarters from the UK to the U.S.

In a research report that matched Barclays to JPMorgan, UBS said the two banks are "broadly comparable" and that while Barclays has a smaller balance sheet and in pre-mitigation Basle III terms looks better capitalized, it remains "mired in the fog of regulatory uncertainty," which contributes to its low stock rating.

Meanwhile the report says the Fed has signed off on JPMorgan giving it the ability to reinstate meaningful distributions to shareholders by increasing its dividend and allowing it to begin repurchasing its own shares.

A U.S. spokesman for Barclays declined to comment on the report.

UBS analysts John-Paul Crutchley and Alastair Ryan, both based in London, went on to point out that the so-called 231 "code" management staff who run Barclays received remuneration of 554m in 2010. Shareholders, on the other hand, who provide 51bn of equity capital, received a dividend of 653m, barely offsetting the decline in the firm's market value during 2010. While staff compensation is driven by international comparisons, rewards to shareholders are increasingly determined by local regulators. If this difference becomes permanent, we think Barclays has little option but to consider shifting domicile.

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