Barclays plans to slowly build out its investment bank in Asia, but it’s recent history of retrenchments might make this recruitment drive a challenging one.
Chief Executive Jes Staley wants Barclays’ corporate and investment bank (CIB) to selectively expand in Asia over the next two to three years, reports Reuters. Asian growth is now critical to Staley’s ongoing efforts to increase his firm’s investment banking market share globally.
Barclays’ CIB unit will be hiring both bankers and traders in Asia, although we understand that the bulk of these hires will be made toward the end of that period (i.e. 2021 onward) and that the expansion is dependent on Barclays hitting global returns targets. Don’t expect a flurry of new vacancies at Barclays in Hong Kong or Singapore just yet.
More specifically, the markets team within CIB wants to take on about 60 people (about a 10% to 11% rise over its current headcount), with a focus on FX trading, emerging markets trading in Singapore, and credit trading in Hong Kong, Stephen Dainton, head of global markets at Barclays, told Reuters.
“We’re seeing increased activity in the credit and convertible bond markets now that there’s more value to be had following the fall in prices in Q4 last year. It’s not surprising that Barclays is looking to take advantage of this,” says Hong Kong-based trader-turn headhunter Matt Hoyle. “FX volumes are still depressed, but it’s likely they will rebound in the next couple of years as well.”
Barclays may not find that its markets recruitment is entirely straightforward, however. Although the British bank won’t be rebuilding in Asian high-touch cash equities, it’s 2015 pull-back from that sector is still fresh in the minds of some traders (regardless of product) in Hong Kong and Singapore, says a Hong Kong-based headhunter, speaking off the record.
There are also wider concerns about the viability of Barclays’ proposed expansion in Asian CIB. That’s because the bank has been bullish on Asia before – and been forced to scale back. Then CEO Bob Diamond announced in 2009 that Barclays was investing in Asia, including across fixed income, currencies and commodities, as well as equities and advisory banking. Barclays’ management remained upbeat about Asia until at least 2011.
Things changed in 2016 when Barclays cut jobs and closed offices in second-tier markets like Indonesia and Malaysia. The bank now has Asia Pacific operations in Hong Kong, Singapore, Japan, India, China and Australia. It has seen an uptick in regional performance over the past two years.
Barclays’ current strategy – which is not changing under Staley’s proposed recruitment plans – allows Asian clients to access markets globally, and international ones to tap local markets. “If you want to be relevant to global clients, you have to be in Asia,” Dainton told Reuters.
The 2016 cutbacks mean Barclays will be building from a low base, however. “It appears to be a careful strategy over three years, but it could potentially be hard to execute, given Barclays’ comparatively small current footprint,” says a senior banker at a European bank in Singapore.
Barclays finished outside Dealogic’s top-10 banks for Q1 Asia (ex-Japan) IB revenue – a table dominated by US and Chinese firms.
Barclays could attract strong bankers and traders to its ranks, if it can convince them that its latest (i.e. 2016 onward) strategy in the region is a sensible one. “Although Barclays has previously pulled back from Asia, it’s still a recognisable brand name here,” says Lucas Yeo, head of banking and finance at recruiters Tangspac in Singapore. “If candidates think twice about joining, Barclays managers must clearly communicate their vision and goals for the region,” he adds.
Barclays did not comment on its Asian recruitment.
Image credit: flavijus, Getty
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