Bucking two powerful trends, London-based Barclays Capital is focusing its growth plans on U.S. fixed-income markets, including mortgages. The bank remains firmly in hiring mode.
Barclays Capital, the investment banking division of Barclays PLC, plans to expand global headcount by 10 percent this year, or 1,500 people. The growth comes after the bank added 6,600 staff over the previous three years. In March, President Jerry del Missier will relocate from London to New York in order to lead an expansion within the U.S., even while other bulge-bracket institutions relocate executives and senior managers in the opposite direction to oversee growth in Middle Eastern and other emerging markets.
Since last autumn Del Missier has repeatedly spoken of credit and mortgage trading as areas where he's looking to add resources. Although damaged by asset write-downs, Barclays Capital still managed to post higher pre-tax profits in 2007 than 2006. Del Missier became sole president early in January, when his co-president, Grant Kvalheim, resigned.
"We see a great opportunity in the U.S. where market dislocation has affected a number of participants," del Missier told Financial News. "We are going to build up our corporate coverage and grow our commodities, rates and foreign exchange and high yield businesses."
Last November, Financial News quoted del Missier calling credit "the fastest-growing asset class in the next five years," and saying, "Mortgages will remain a big activity and we are looking to add resources to our U.S. mortgage business." He acknowledged at the time that the sub-prime and mortgage markets "will have some challenges to get through" in the next couple of years.
In its full-year results released last week, corporate parent Barclays PLC disclosed net credit write-downs of 1.64 billion ($3.26 billion at the Dec. 31 exchange rate), up from 1.3 billion at the end of October.