Barclays CEO ‘Very Happy’ With Bankers, Traders Notching Gains

(Bloomberg) — Barclays Plc is preparing for a wave of dealmaking on both sides of the Atlantic as newly installed President Donald Trump ushers in a more business-friendly regulatory environment in the US and companies across Europe reach for growth. 

That should be good news for Barclays’ investment bankers and traders, Chief Executive Officer C.S. Venkatakrishnan told Francine Lacqua in a Bloomberg Television interview on Wednesday. Already, the two groups have been gaining market share in recent months, he said. 

“I was very supportive of the investment bank and I remain so, it has been a very good business,” Venkatakrishnan said in Davos, Switzerland, where he is attending the World Economic Forum. “We’ve shown good results in banking and in markets, we continue to retain and in fact gain market share. I feel very happy with the investment bank.”

The comments come about a year after Venkatakrishnan unveiled a new strategy for Barclays. The size of Barclays’ investment bank has long been a source of debate among investors because it consumes large amounts of capital compared with other parts of the bank’s business that produce better returns. 

But instead of making plans to dispose of or shrink the division, Venkatakrishnan announced Barclays will grow other divisions such as retail banking in order to shrink the investment banking unit’s share of the firm’s overall business and boost its share price. 

The moves seem to be working: The value of Barclays shares have doubled in the past year, far outpacing the 14% advance in the FTSE 100 index during that time.  

Barclays is the one of the few European banks with a large investment banking presence in the US, and the firm generates about 40% of its revenue in US dollars. Venkatakrishnan said two things will drive deal activity higher in the US: stable interest rates and a more business-friendly approach to regulation. 

“Interest rates have stabilized — they’re high but they’re stable, so at least people know what they’re getting into when they’re making financial judgments,” he said. “The second thing is the more business friendly attitude that may be more admitting of M&A activity.”

In Europe, the CEO said the continent’s push for growth to keep up with the US will require more companies to look to deals.  

“In Europe, the economic rewiring that needs to take place will mean an adjustment of ownership of certain companies and entities,” he said. “So I think on both sides of the Atlantic there will be greater dealmaking.”

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