Awards for Excellence 2016
Overall, Dealogic’s revenue league table in western Europe makes the fall of previously pre-eminent regional investment banks painfully obvious in the 12 months covered by these awards. Examples of European firms that are not losing market share to US rivals, even in their national home markets, are rare.
That fact makes the progress at Barclays, which wins the best investment bank award, particularly remarkable. Its ambitions in investment banking, perhaps, were always going to take time, even after its 2009 acquisition of Lehman Brothers. Its mantra now is that its goals should be realistic. Outside the UK, that means recognizing that trying to outrun French banks in France, for example, would be foolhardy.
The post-crisis economic and regulatory environment has also forced a reprioritization of capital and returns over revenues; concerns that come into every deal and hire it does. The result of those sometimes painful lessons is already evident in the investment bank’s return on equity, which doubled during the awards period at group level, while profit before tax rose 16%.
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Sam Dean, Barclays: realistic goals make it a winner |
The bank has also demonstrated momentum in its investment banking revenues. In the year since it named Sam Dean and Crispin Osborne as co-heads of the EMEA banking franchise in April 2015, its place in the western Europe league table rose to within a whisker of the top five – ahead of any European firm except Deutsche Bank, which slipped from first to third. In equity capital markets, in particular, Barclays’ efforts are paying off; it had an especially good run in the UK, being the only UK bank on Worldpay’s IPO, for example. It is also winning more IPO mandates in continental Europe, such as the IPOs of Scout24 and ADO in Germany.
Sometimes it has had to make do with junior roles, but that too is changing, with an important privatization mandate in Italy, for example, where it was also sole global coordinator on the IPO of Banca Sistema. One part of its strategy is to build its equity advisory business, which now counts 50 corporate broking mandates in the UK, including 20 FTSE 100 clients.
The momentum is also evident in M&A. This is not a traditional area of strength for Barclays, but one in which it is notching up some high-profile assignments that tie in with its financing capabilities, such as Shire’s combination with Baxalta and AB InBev’s SABMiller takeover.
Barclays has been careful not to diminish its fixed income franchise, making sure it leverages its US presence to help European firms tap US capital. Deals this year included BHP Billiton’s triple currency $6.4 billion offering, a slew of debt issuance, hybrids, and numerous ground-breaking bank capital deals. Finally, despite retreating from more capital intensive markets businesses before rivals, it remains top of European credit and rates trading, according to Greenwich Associates – more encouragement for group CEO Jes Staley.
