Barclays takes knife to Asian investment bank

Barclays to cut 100 Asia-Pacific jobs in investment banking and markets, as the old guard make way for the new.

Barclays is set to cut 100 jobs across investment banking and markets, or about 5% of its workforce from its investment bank in the Asia-Pacific region, according to a source familiar with the matter.

Investment banking encompasses equity and debt capital markets plus mergers & acquisitions, while markets includes trading in fixed income, currencies, commodities and equities.

The UK bank has not given any breakdown on the planned cuts. But in view of its recent announcements about its intention to exit most of its commodities activities globally and reduce its risk-weighted assets, some bankers within the firm expect a larger proportion to come from the more capital-intensive side of the business such as commodities trading, swaps and derivatives. 

“It has become too expensive with regulations," said one Barclays banker, who declined to go on the record. "Most banks are downsizing commodities because it is too expensive to run, along with swaps and derivatives."

At the bank's annual general meeting on April 24, Barclays chief executive Antony Jenkins told shareholders that the bank will cease to trade physical commodities such as agriculturals. He said this is "illustrative of the kind of business we will exit" where the bank cannot make the returns that its shareholders deserve.

Barclays is also creating a bad bank of unwanted assets and has said it will cut £115 billion of risk weighted assets, of which about £90 billion will come from the investment bank. This will include non-core commodities and derivatives risk-weighted assets.

The 100 investment banking jobs that are set to be cut in Asia are a fraction of the head count reduction planned globally, as the bank seeks to become leaner and boost returns. Barclays said in May that it would cut 7,000 jobs within its investment bank by 2016, bringing the total number of jobs to be cut across the bank up to 19,000.

New guard

Barclays has seen numerous high-profile departures in its Asia-Pacific business since Robert Morrice, chairman and CEO of Barclays Asia-Pacific, announced his retirement in early May. Morrice will leave the bank at the end of June, to be replaced by Andrew Jones and Eiji Nakai, who are earmarked to become co-CEOs. 

Since then, Matthew Ginsburg has stepped down from his role as regional head of investment banking to take a position within the firm outside of the region. Barclays hired Ginsburg from Morgan Stanley in 2009 to build up its traditionally debt-led investment banking division by bulking up its equities and M&A business.

There have has been a slew of other departures in recent weeks. Johan Leven, Barclays' Asia-Pacific head of corporate finance, has left the firm, as has Helge Weiner-Trapness, head of the bank's Asia-Pacific financial institutions group.

In addition, Jason Rynbeck, vice-chairman of M&A for the region, left Barclays for HSBC as its new head of M&A for Asia Pacific. Marc Benton, Barclays head of Asia-Pacific head of oil and gas investment banking, too has left and, according to sources familiar with the matter, is also headed to a rival bank.

Barclays has promoted internally to fill gaps, naming Vanessa Koo as its head of Asia Pacific M&A to replace Edward King, who moved to the US to take on a new role as executive chairman of global M&A earlier this year. In addition, Wu Sheng has been appointed head of greater China coverage.

The bank is expected to make more appointments on Wednesday.

¬ Haymarket Media Limited. All rights reserved.
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