Fees in Europe’s biggest investment banking market by far held up better than elsewhere on the continent this year, but they still fell steeply. Success in this context has been all about gaining share in a shrinking market, and that is exactly what the UK’s best investment bank, Barclays, has continued to do.
Under group CEO Jes Staley, the bank’s markets business saw income swell by 7% to reach £5.2 billion in 2019 while banking fee income also held up better than peers at £2.5 billion. The first quarter of 2020 was a record one for the markets business, with fixed income, currencies and commodities income up by 106% to £1.9 billion and equities income up 21% to £564 million.
While its relatively strong US business makes Barclays a rare success among European investment banks, its UK home is also vital. In Dealogic’s UK league tables for the awards period, only Barclays and JPMorgan are in the top three in more than one product. Of those two only Barclays is top of any one product – debt capital markets – in which it took the lead from HSBC this year.
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Jes Staley |
This leadership in the debt markets became especially apparent after the coronavirus struck, as Barclays arranged almost half of commercial paper issuance under the Bank of England’s Covid corporate financing facility scheme, amounting to £9.9 billion by late May.
Before this, it was instrumental in key industry developments such as helping issuers Lloyds and Nationwide establish Sonia benchmarks and in Danish energy company Orsted’s green sterling issuance – the latter coming in a year that also saw Barclays set up a new sustainable and impact banking group.
On the equity capital markets side it doubled its market share to 10%, according to Dealogic, bookrunning IPOs such as Trainline’s £1.1 billion listing. It helped lead the reopening of UK ECM activity during the coronavirus crisis, with capital raisings for firms such as SSP and Hyve. Its corporate broking build-out also saw it act as defence adviser for the London Stock Exchange against a hostile bid by the Hong Kong Stock Exchange.
In M&A, Barclays advised on deals including GIP’s £2.9 billion sale of a majority stake in Gatwick Airport to Vinci, Ovo Energy’s £500 million acquisition of SSE Energy Services and the LSE’s £27 billion acquisition of Refinitiv.
It also advised on Pennon’s £4.2 billion sale of its waste management business to KKR and on the £8.2 billion sale of Tesco’s Thai and Malaysian operations to Charoen Pokphand.