Barclays Wealth continues streamlining
Barclays’ latest round of restructuring is hitting the investment banking business hard, but the future for the wealth management business might not be so bright either.
Barclays announced it is to cut 19,000 jobs globally over three years, refocusing some of its businesses and creating a “bad bank" to sell off or run down assets that were deemed to be non-core – again over three years.
Investment banking is being hardest hit. It hasn't been confirmed how many lay-offs will be in its wealth management business, Barclays Wealth.
Some £9 billion of the £115 billion of RWAs put into the non-core segment will be from Barclaycard, corporate and wealth, but will likely be limited to some under-performing assets out of the wealth business and not of any meaningful size, says one source.
So what does this mean for Wealth? Peter Horrell, head of wealth at Barclays, has been charged over the past year with looking at how to better align the wealth management business with the corporate bank – and now under the new strategy, the two will be on the same platform, joining the retail business, which is being streamlined to chiefly a UK retail business.
The three businesses will be overseen by Ashok Vaswani.
Will Bowen, a spokesman for the firm, says the UK wealth management business would “see the benefits of being rolled onto the retail and corporate platform, which has seen significant investment in recent years”.
Barclays has an opportunity in the UK, as wealth management is a fragmented and broken market right now. One London-based consultant says the UK wealth management market is under-served and open to players who will invest.
“There are very few good relationship managers in the UK, and no wealth management firms that stand out as being smart and operating in clients’ best interests,” says the consultant. “It really is an opportunity for a firm that decides to commit and invest.”
Having been flailing around in the UK, and back and forth on a global strategy, the new approach might provide some foundation to rebuilding a brand and client base.
Barclays announced last year it would be dropping its designs to be a “global” bank – pulling out of 130 countries by 2016 – and instead returning to its roots as a UK bank with select international businesses. The US will be a continued focus for the firm, as will Japan and Africa.
While other private banks are putting Asia at the top of their growth strategy, Barclays Wealth is not.
There will be some retreating and focusing on serving international clients in Asia, and clients in Asia that need international banking services. Asia’s wealthy who bank with the firm will therefore not be turning to the bank for domestic corporate-related business.