Barclays’ dealmakers post record quarter amid M&A boom

Barclays dealmakers hauled in record fees during the third quarter as the UK lender followed Wall Street rivals with record performance in investment banking.

The UK lender pulled in £971m in investment banking fees during the third quarter, an increase of 59% on the previous year and its strongest three month period ever. M&A revenues of £253m were nearly double the same period in 2020, with volumes already surpassing $4trn so far this year as activity has boomed.

Overall pre-tax profit was £2bn during the third quarter, which was ahead of analyst expectations on the back of £5.5bn in revenues.

“While the CIB performance continues to be an area of strength for the group, we are also seeing evidence of a consumer recovery and the early signs of a more favourable rate environment,” Barclays chief executive Jes Staley said in a statement.

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While Barclays’ dealmakers continue to feast on large fees, performance within its large fixed income unit has dropped from the pandemic highs that helped bolster overall bank revenues last year. The UK lender made £803m in fixed income revenues during the third quarter, down by 20% on the same period last year and by 33% for the first nine months of 2021. A 10% gain in stock trading still meant overall trading revenues at Barclays were down by 8%.

Overall corporate and investment banking revenues at Barclays were up by 8% to £3.1bn.

Investment banks have pulled in a record $93bn in fees in the first nine months of 2021, according to data provider Dealogic, as both M&A and equity capital markets activity has surged. M&A was a particular bright spot during the third quarter, surging by an average of 193% at top Wall Street banks, with record performance at Goldman Sachs, Citigroup, JPMorgan and Morgan Stanley.

So far this year, Barclays ranks sixth by investment banking revenue with $3.8bn, according to Dealogic, leapfrogging Credit Suisse to become the top European bank in the league tables. The Swiss bank has lost dozens of senior bankers this year as it reels from the fallout from the Archegos Capital and Greensill scandals.

The deal boom has led to a battle for talent, which has pushed up pay. Barclays has been both bolstering its investment bank on Wall Street in Europe and losing some key dealamakers to rivals including Daniel Ross, who left to head up Deutsche Bank’s UK investment bank, and Derek Shakespeare, its former head of UK M&A who also joined the German lender.

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Barclays unveiled an investment bank shake-up in July, installing Jean-Francois ‘JF’ Astier and John Miller as co-heads of investment banking and a new management team comprising 11 senior dealmakers. In Europe, Pier Luigi Colizzi, was promoted to head of its investment banking in the region, while it also hired Ingrid Hengster to lead its German operation and Laurent Meyer as a vice chairman of investment banking in Europe. 

To contact the author of this story with feedback or news, email Paul Clarke

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