Barclays' strength in the U.S. looks like a vindication of Jes Staley's strategy

Barclays’ commitment to retain a presence in global investment banking was placed under renewed scrutiny in 2019 but the bank has answered its critics with an improvement in its ranking and ended the year as Europe’s leading investment bank in the U.S. by a clear margin.

Globally, Barclays was ranked in sixth place by investment banking fees last year, leap-frogging Credit Suisse to become Europe’s leading corporate finance house, according to Dealogic.

The bank won market share in Europe, but the improvement was also down to the strength of its U.S. business, the jewel in the crown of Barclays corporate finance business, which climbed one place to fifth in the U.S. investment banking fee rankings last year, according to Dealogic.

In doing so it displaced Citigroup and broke into the leading group of U.S. banks, in doing so establishing itself as the leader of a pack of only three European banks to make the top ten. Swiss rival Credit Suisse remained in seventh place while Deutsche Bank held onto 10th spot.

Barclays maintained fifth spot in the both U.S. debt capital markets and M&A, and jumped two spots to sixth in equity capital markets, which Staley had previously identified as a weakness that needed addressing. After losing out on big US IPOs, Barclays beefed up its team in 2019, hiring Kristin DeClark, described by Staley as “the best ECM banker in Silicon Valley” from Deutsche Bank and Taylor Wright from Morgan Stanley. Barclays also bagged roles on the listings of ride-sharing group Uber and social network Pinterest.

Barclays sees itself a more of a US bank than its rivals thanks to the acquisition of Lehman Brothers US franchise in 2008, but it began the year with something to prove. CEO Jes Staley was under pressure to prove that his commitment to investment banking was a wise one. Activist investor Eddie Bramson had built a 5.48% stake in the bank via his vehicle Sherborne Advisers and was lobbying for Barclays to scale back its global investment banking ambitions. Staley responded by taking oversight of the investment bank himself, and in March he fired Tim Throsby – who he had hired to great fanfare just 18 months previously - as head of Barclays International, which housed the investment bank following a disagreement over profit targets.

Barclays also had to cope with a number of senior departures from its U.S. investment banking business, particularly from its financial institutions team, which lost five members last year. Sources say the departures included one banker retiring as well as another going to a client, and the bank has rebuilt the team combination of hires and internal promotions. In December the bank promoted three FIG coverage bankers to managing directors.

It has also strengthened in other areas. As well as the recruitment of Wright and DeClark as co-heads of US ECM, Barclays beefed up its presence in the technology sector by recruiting Akhil Ahuja as Head of Enterprise and Communications Technology Banking and Riaz Ladhabhoy as Co-Head of Internet Banking, Americas. In an industry where you’re only as good as your next deal, Barclays wont be claiming victory yet. But on the strength of 2019, Staley can feel vindicated.

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