Barclays alone in evading the Emea investment banking gloom


The UK bank hasn’t had a dedicated head of investment banking since veteran Tom King left in March. A new chief executive of corporate and investment banking, ex-JP Morgan equities banker Tim Throsby, will inherit the business in the New Year.

Preliminary data from Dealogic highlights the bleak situation for investment banks, with 2016 revenues in Europe totaling $ 11.3 billion as of September 23 – an 18% drop from the $ 13.8 billion sum earned by banks in the first nine months of 2015. In the wider Europe, Middle East and Africa region, revenues are down from $ 14.9 billion to $ 14.3 billion.

No one has been spared from the decline, with every one of the top 10 banks by Emea investment banking revenues earning less in dollar terms so far this year – except for Barclays.

The UK bank has earned $ 594 million in investment banking revenues in Emea in 2016, a shade higher than the $ 583 million in the first nine months of 2015 and enough of a rise to catapult the bank from seventh spot in the league tables a year ago to third so far this year, behind the leading duo of JP Morgan and Goldman Sachs. The two Wall Street houses each earned more than $ 1 billion in revenues in the first nine months of 2015, but their $ 867 million and $ 697 million in earnings so far in 2016 still keep them well clear of the chasing pack.

Sam Dean, Barclays’ co-head of banking for the Emea region, told FN that “one has to remember that our Emea IBD [investment banking] business is still in a growth phase, as we continue the project started with the acquisition of Lehman in 2008 and grow our M&A and ECM franchises” adding that perhaps in the past year the bank had seen the greatest breakthrough in continental Europe.

He added: “We benefit from the full support from our senior management and are relentlessly focused on performance and returns, in an environment where some of our competitors have perhaps been pre-occupied with internal challenges. Despite the strong showing this year, we expect the operating environment to remain challenging and recognise that there is still much more for us to do.”

While Barclays stands in third place, the final week of the third quarter could yet have a decisive influence on the league tables, with four banks tussling for third spot and just $ 30 million in revenues between them. Behind Barclays are Citigroup and Deutsche Bank (both on $ 583 million), and Bank of America Merrill Lynch on $ 564 million, with another US bank, Morgan Stanley, not far behind on $ 517 million in Emea revenues, according to Dealogic.

Globally, investment banking revenues have dropped 14% from the nine-month stage in 2015 to $ $ 50.7 billion, the lowest tally since 2012, according to Dealogic, with a stark drop in equity capital markets business the chief reason for the drop – ECM has recorded a record low share of just 19% of overall investment banking revenues.

Debt capital markets and M&A work each generated 31% of investment banking revenues, helped by record activity in each of those markets in August, traditionally the leanest month of the year for revenues.

But Europe did not enjoy that summer windfall, with third quarter investment banking revenues of $ 2.9 billion down 32% from the previous quarter to the lowest three-month total since 2002.

UPDATE: This story has been updated to include a quote from Sam Dean

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