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Friday, 31 January, 2003, 22:03 GMT
Barclays buys US online broker
Charles Schwab, co-chief executive, Charles Schwab
Charles Schwab's UK offices will be closed
Charles Schwab, the number one online stock and discount brokerage is to sell its UK operations to Barclays bank.

Barclays said Charles Schwab's stockbroking offices, which employ 400 people in Birmingham and Milton Keynes, are to close.

A Barclays spokeswoman told BBC News Online job losses were "likely" although she could not say how many because staff would have to consulted first.

As the founder and major shareholder of this company, I will continue to play a very active role as the chairman

Charles Schwab
She said it would take between six to nine months to integrate the two firms and that the sites would probably be closed in the second half of 2003.

Barclays also said some jobs would be transferred to Barclays Stockbrokers' offices in Glasgow and Peterborough.

The deal, for an undisclosed sum, would give Barclays more than 150,000 accounts with $3.6bn in assets.

Barclays said the acquisition, which brings together the UK's largest retail stockbroker, Barclays Stockbrokers, with Charles Schwab Europe, would create the leading market player in UK retail broking.

Barclays is the UK's number three bank.

Not big enough

The American discount broker has been suffering from the global market meltdown, which led to a slump in customer stock trading.

Schwab admitted that it is not large enough to compete in the UK individual investor market by itself.

The broker also announced on Friday that its board named David Pottruck as sole chief executive officer, adding that founder Charles "Chuck" Schwab will continue as chairman.

Until now Mr Schwab was co-chief executive alongside Mr Pottruck.

"As the founder and major shareholder of this company, I will continue to play a very active role as the chairman," Mr Schwab said in a statement.

"As many experts have suggested, from regulators to Congress to independent blue ribbon panels, it is important in today's environment that the positions of CEO and chairman be distinct and that the chairman play a central role," Mr Schwab said.

'Bad news for value'

Commenting on the deal, Ivan Schouker, Chief Executive of American Express Financial Services, said: "Consolidation was an inevitability Schwab has now been forced to accept.

"Barclays will be integrating at a bad time for their online investors.

"They need stability, service and competitive prices.

"This deal combines two of the high price players. That spells bad news for value and service."

Founder

Fifty-four-year old Mr Pottruck joined Schwab in 1984 and was made president and chief operating officer of Charles Schwab four years later.

He became the company's co-ceo in January 1998.

Mr Schwab, 65, founded his company in the early 1970s.

He led a management buyback of the firm in 1987 from Bank of America, taking it to the New York Stock Exchange that year.

The San Francisco-based company has $765bn in assets.

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