Barclays
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Top unit
Barclays: The bet that paid off
Since Jes Staley took charge of Barclays at the end of 2015, he has faced constant questions over his ability to reposition the firm as a credible force in investment banking. Sticking to his guns in the face of activist shareholder pressure, he now looks vindicated, but growing from here presents a new challenge.
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UK firm considers FDIC route; foreign banks step up presence in US.
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Barclays’ strong performance earns its chief the right to be heard; Varley defends the universal bank model.
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Indonesia, Philippines, Vietnam debt mandates won; challenge of growing ECM, M&A in competitive field.
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Barclays issued its third-quarter trading update on November 10, the same day as HSBC announced its results. Ten days later, its shares have slipped about 11%. In fact, Barclays’ share price is down 20% since the Qatar sovereign investment fund sold part of its stake in the UK bank on October 20. Another interesting footnote to the credit crunch has been how supposedly strategic sovereign wealth funds have transformed themselves into opportunistic short-term traders, avaricious for a quick profit. Some say that Barclays’ interim trading statement was disappointing. Group profit before tax for the nine months ended September 30 fell by 19% to £4.5 billion, profit before tax in the investment banking and investment management division was £1.9 billion (down 38% from 2008), impairments rose in the UK retail banking division and the cost/income ratio spiralled higher in the investment bank. It should be noted, however, that last year Barclays had a substantial one-off gain on the Lehman acquisition, and that it continues to increase revenues faster than expenses with a positive cost: income jaws of 7%. The bank also said that it expected impairments for the full year to be around the bottom of its anticipated range for 2009 at £9 billion.
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Barclays Capital has rolled out an improved version of its highly rated Barx trading platform.
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In December 2008, I wrote a piece about Barclays, criticizing the expensive £7 billion capital-raising from Middle East investors and the decision to purchase Lehman’s US broker-dealer last September when the outlook for investment banking was at its most opaque. The article elicited howls of outrage from Barclays’ supporters. One indignant reader snorted: “I am encouraged by your criticism of Barclays’ management.”