A senior Barclays banker recently lost his job due to the recent subprime squeeze in the credit markets. Meanwhile, The Times has recently published an article about the problems that the bank as a whole is facing due to sub-prime related losses:
"Barclays Bank was dragged deeper into the sub-prime mortgage crisis last night after Landesbank Sachsen, a major client, had to be rescued by a rival state-owned bank in Germany.
Barclays appears to have been responsible both for designing a complex fund that got Sachsen into difficulty and for helping to pull the plug on the bank by demanding margin calls in respect of another Sachsen investment." read more
As a result of the problems, Barclays' share price has dipped significantly, and this has had the double effect of causing Temasek's investment to dip by about 15%, while at the same time Barclays' bid for ABN has been diluted because part of the bid was made in stock. See this article for more information.
Now, it looks like Temasek's investment will quickly start off as a loser, and it also seems like it has taken a significant stake in a bank that will have a slightly poorer competitive position vis-a-vis the RBS-ABN combination, which looks more likely than not to be consummated sometime soon.
Indeed, as its size continues to grow and assets under management balloon, Temasek seems to be running into problems as it ventures overseas, beyond Singapore's shores. Only time will tell if this investment turns out to be the second major disappointment since the Shin Saga.