Outlook: Barclays looks desperate for a deal, any deal

FIRST NatWest. Now Standard Chartered. Tomorrow, who knows, Credit Lyonnais? Barclays' hunt for a partner with whom to "consolidate" seems to be taking on an increasingly desperate air. Martin Taylor's belief in the consolidated future of banking, both domestic and international, is well known but does the Barclays' chief executive really need to be tarting himself around town with such apparent abandon?

From the outside, this begins to look like a man without a strategy. We know a merger with NatWest was suggested some months back. We now know some kind of a suggestion was also put recently to Standard Chartered, albeit in an off the cuff manner which may not have been wholly serious. And there are persistent rumours that any day now Barclays will turn round and merge with the Pru.

While all three of these potential partners fit in with the general theme of consolidation in the financial services industry, they are in truth all so different one from another as reasonably to raise the question of what on earth is going on here. How can Barclays seriously lobby for a merger with NatWest one week, then turn round and start working on something wholly different the next. NatWest would be a cost cutting domestic merger, consolidating Barclays already powerful position in UK retail banking. Standard Chartered would for Barclays be a leap into the uncharted waters of international banking.

All managements need to have a fall back plan, of course, but this begins to look less like a plan B than someone who's just got to do a deal, any deal. That's always a dangerous thing. Mr Taylor was travelling yesterday and was therefore unavailable for comment, but he really does need to say something to the City; his search for a merger partner looks more and more open to ridicule. There were almost open recriminations yesterday about the now famous Chez Nico dinner with Malcolm Williamson, chief executive of Standard. Who invited whom, who suggested a merger, who leaked it to the press, and why? The whole thing is plainly getting out of hand; it smacks of loss of control.

Does Barclays really need to do a deal, or is this not simply the pursuit of size for the sake of it? You don't need much of a memory to recall the days (though it was before Mr Taylor's time) when Barclays was constantly vying with NatWest for the position of Britain's biggest bank - largest by market value, largest number of branches (nobody wants that accolade anymore) largest profits, largest bad debt provision etc. That was in the 1980s. Both have since been overtaken by what in those days was an also ran, Lloyds.

In part, Lloyds achieved this breakthrough via that much forgotten but usually rewarding route to business success - hard graft and sensible management. As the other two were recklessly expanding their loan books and pursuing the testosterone driven world of investment banking, Lloyds was sticking to its knitting and being careful not to miss a stitch.

But it was also down to a couple of big takeovers - first Cheltenham and Gloucester building society, and then TSB. It is not unreasonable of Mr Taylor to dream of becoming the biggest once more, but it is a crude yardstick of success and if the ambition of it fails to create shareholder value along the way, it isn't worth a fig. Sir Andrew Large, whose appointment as deputy chairman at Barclays was announced yesterday, may find he has a few wings to clip by the time he arrives.