The great Barings banking dynasty, whose coffers helped build the British Empire, has pulled back once more from the edge of disaster.
Britain's oldest merchant bank, ruined by $900 million in trading losses on Far East markets, announced Sunday it had accepted a rescue deal with the Dutch ING group that would give it a huge cash injection to keep on trading.Under the deal, ING, a banking and insurance company, would get Barings for a symbolic 1 pound ($1.65). The Dutch group agreed to continue using the name Barings and hopes to resume business within days.
But court-appointed administrators disclosed that ING was not buying Baring Futures, nor was it taking on Baring Securities Tokyo and Baring Securities Singapore.
The ING offer beat out a joint bid from Dutch rival ABN Amro and U.S. investment bank Smith Barney.
Despite its spectacular collapse, Barings remains a valuable company with many assets, including its client base and staff, and the potential for making vast sums of money.
Barings was brought down in a former colony, Singapore, where 28-year-old trader Nick Leeson lost an estimated $1 billion wrongly betting that Tokyo stock prices would rise last month.
Lawyers for Barings told the High Court, which must approve the takeover, that wild trading on Asian markets cost Barings almost 50 percent more - $1.46 billion - than the originally estimated $1 billion.
The crisis had echoes in the bank's 233-year-old history.
In 1890, Lord Revelstoke, then head of the Baring family, told his friend Everard Hambro that the bank faced collapse because of bad Argentine loans.
"I shall be able to tell you Monday whether we can go on, or whether we have to stop," he said.
On that occasion the Bank of England, which failed to provide a safety net for Barings last weekend, put together a rescue package and Revelstoke had to sell houses, paintings and furniture to pay off his debts. His wife was said to have died of shame.