Barclays latest to shut its Asian equities unit built from acquisitions

Barclays latest to shut its Asian equities unit built from acquisitions

 

BARCLAYS' decision to shut its Asia cash-equity business and shed more than 200 jobs in this region puts it in familiar company with BNP, CIMB and Standard Chartered, as they shut or restructure an unwieldy business that emerged mostly from assets bought around the time of the crisis.

The UK bank on Thursday was reported to have closed its cash-equity research, sales and trading as well as convertible-bond trading businesses in all Asian countries, Financial Times reported.

The closure takes immediate effect, it said, citing a memo circulated to clients of the bank, which had about 18,000 people in the Asia-Pacific on its payroll as at 2014.

This particular business was meant to profit from executing trades of fund houses and large institutional investors, and offer research recommendations to clients keen on Asian securities.

Barclays is reported to be keeping its prime brokerage service here, which means its privileged clients should still find access to securities lending and margin financing.

There are no numbers available for the Singapore operations, but sources say there have been cuts here.

The Singapore-based media spokesman lost his job, The Business Times understands; press representatives based in Hong Kong did not respond to a repeated call for comment.

These make up part of the 1,000-odd job cuts expected across the investment-banking division overall, and are an odious addition to 7,000 jobs losses announced in 2014.

Barclays is also reportedly exiting operations in Australia, Malaysia, South Korea and Taiwan.

As early as a year ago, it was boasting of senior hires to its equities team in Asia. Last May, a senior Barclays executive told Bloomberg that the bank should turn a profit from its cash-equity business by the end of this year, but acknowledged that this business was struggling to make money for most banks.

Barclays' expansion into cash equities in the region began in 2009, following the acquisition of Lehman Brothers' US operations, which had crumbled in the global financial crisis.

It followed a similar path taken by Standard Chartered, which had, seven years ago, moved into the institutional-equities business by buying the Asian business of brokerage JPMorgan Cazenove.

In 2015, Standard Chartered bowed out of that business, cutting about 200 jobs, including those in Singapore.

CIMB cut dozens of jobs in its Hong Kong investment banking and equities business this month.

This retraction also followed an expansion into a business acquired from the Royal Bank of Scotland in 2012.

Under a restructuring exercise, BNP Paribas said in January it would outsource its Asian equities trading to Instinet, the electronic brokerage owned by Japan's Nomura.

In 2005, BNP Paribas acquired the equity execution business in the Asia-Pacific of Calyon, Credit Agricole Group's Corporate and Investment Bank.


This article was first published on January 22, 2016.
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