Barclays investment bank grabs market share in deals, executive says

LONDON: Barclays’ investment bank is gaining market share in deal advisory and equity capital markets as part of a drive to improve returns, its global investment banking co-heads said in a presentation to analysts and investors on Tuesday.

These gains follow a broad strategy overhaul across the British bank unveiled by CEO C. S. Venkatakrishnan in February, aimed at improving profit by focusing on its core UK business and reorganising its structure.

Cathal Deasy, one of the co-heads, said Barclays investment bank had grown its fee share in underwriting equity deals to 3.6% this year from 2.1% last year, and advisory share to 2.9% from 2.6% in 2023.

The success follows an extensive reorganisation in the bank’s sector coverage and investment in staff in key sectors such as Energy Transition, Industrials, Healthcare, and Technology.

“It’s a competitive market, and we are taking share from wherever we can get it,” the other co-head Taylor Wright said, when asked which rivals Barclays was taking share from.

“Our largest markets are the US, and the top five American firms dominate the U.S ... we are taking share from those firms.” He said 64% of all new managing director hires in 2023 and 2024 have been in those sectors and other key industry coverage roles.

Barclays has split its business into five operating divisions from a previous three, in a move that the CEO, known internally as Venkat, said would help improve transparency on each business’s performance.

Since February, the bank has embarked on a series of what it calls “deep dive” presentations on each division, with Tuesday’s event focused on its investment bank.

The business, which comprises activities such as dealmaking and the global markets trading business, has attracted scrutiny as Barclays sought to justify its allocation of capital relative to its performance.

The investment bank contributes around 47% of the group’s income as of June this year, but consumes nearly two thirds of its risk-weighted assets. The bank aims to reduce that to around 50%, Venkat said in February.

Barclays expects “modest” cost growth in its investment bank through to 2026 as it tries to improve its returns while keeping a lid on the capital it consumes, CEO C.S. Venkatakrishnan said on Tuesday.