Barclays is undertaking another shake-up of its investment bank, hiring Mike Joo as co-chief executive, alongside Adeel Khan who is promoted to the same role. This move aims to simplify the leadership structure, replacing a four co-head model introduced in 2024. The reshuffle raises questions about the future of Taylor Wright and Cathal Deasy, two of the previous co-heads, while Stephen Dainton, another co-head, announced his retirement last month. The bank is currently ranked sixth globally for investment banking fees, generating an estimated $2.7 billion between the start of the year and mid-August, but still lags behind major US rivals like JPMorgan and Goldman Sachs. Joo previously worked at Bank of America and Credit Suisse, starting his career at Goldman Sachs.
This latest restructuring comes as Barclays has seen numerous leadership changes within its investment bank, with a report indicating this marks the seventh co-CEO appointment in four years. The bank's struggles to gain ground on Wall Street are not new, with past efforts to shrink its investment banking business and focus on specific markets, such as the US and UK, facing challenges. In 2024, CEO CS Venkatakrishnan outlined a strategy to increase focus on other units like retail banking and wealth management, creating a tricky balancing act for the investment bank to deliver growth within capital limits.
Despite efforts to compete, Barclays' trading revenue has lagged behind its Wall Street peers. For instance, in an earlier period, Barclays' fixed-income traders brought in £1.7 billion, broadly flat year-on-year, while equities traders generated £1.1 billion, up 16%. In comparison, Bank of America Corp. reported almost double the trading revenue of Barclays in a previous year. Analysts highlight the difficulty for Barclays to compete with the incumbent scale of large US banks, suggesting that significant acquisitions would be needed to truly elevate its position. However, some acknowledge Barclays' broader operations and successful fixed-income and equities business as a diversification advantage compared to other European players like UBS and Deutsche Bank.
The bank has identified areas for market share growth, including securitized products, European rates, and equity derivatives, aiming to be a top-five player for 70 of its top-rated clients this year, having reached 65. The global markets unit contributed over a third of the bank's revenue in the first quarter, underscoring its importance. The unit has also been shifting towards more stable income sources like fixed-income financing and prime brokerage. Despite these strategic adjustments, concerns persist among investors about how the investment bank can deliver on its potential while keeping assets flat, especially as capital rules are eased for US banks.
