Barclays launched a allegiant defence of its Wall Street ambitions afterward a able achievement on its trading desks, in a admonishment to calls to compress the advance coffer by activist broker Edward Bramson.
Jes Staley, Barclays arch executive, has authentic his administration with a action that involves allocating added basic to the group’s advance coffer at a time aback abounding European rivals are affairs back.
The coffer appear third-quarter balance on Wednesday that provided some absolution for Mr Staley’s plan, with revenues from equities and fixed-income trading up by about a fifth.
“There has been a animadversion that European advance banks can’t attempt with the US, and I would aloof point out that four abode in a row we accept acquired bazaar share,” said Mr Staley.
He added: “The absoluteness of what’s accident with our markets authorization absolutely belies the hypothesis we can’t compete.”
The bullish comments from Mr Staley set the date for a close action with Mr Bramson, who became one of Barclays’ better shareholders this year afterwards accession a pale of 5.2 per cent through his agent Sherborne Investors.
In affairs with investors, Mr Bramson has argued that Barclays should carelessness its appetite to attempt with ample US advance banks like Goldman Sachs and JPMorgan and instead compress or advertise its trading operations.
This would chargeless up basic that could be handed aback to shareholders, according to Mr Bramson, who has fabricated his name in the UK by agitating for changes in action at cyberbanking groups including F&C Asset Management and Electra, the clandestine disinterestedness firm.
Mr Staley’s focus on advance cyberbanking additionally comes at a time of brooding amid European politicians, who abhorrence that US administration in the industry could aching the continent’s prospects.
Equity trading revenues at Barclays rose by 35 per cent during the third division to £471m, while assets in the carefully watched fixed-income trading assemblage was up 9.7 per cent at £688m.
The able achievement of Barclays’ trading desks compared favourably with beyond advance banks like Goldman and Morgan Stanley, although its all-embracing trading revenues are still askew by US rivals.
Mr Staley attributed the advance to his accommodation to appoint added chief advance bankers while additionally accretion spending on cyberbanking trading systems.
However, analysts acicular out that Barclays’ advance coffer was still clearly beneath assisting than its acclaim cards and chump businesses.
Joseph Dickerson, banks analyst at Jefferies, said the acknowledgment on disinterestedness in the advance coffer was 7 per cent, able-bodied beneath the 20 per cent akin in the cards and payments business and 22 per cent at Barclays UK.
Mr Staley accustomed the lower levels of advantage at the advance bank, but insisted a adapted action would leave Barclays able-bodied placed in the accident of an bread-and-er abatement that hits chump spending.
He said: “We accept historically low levels of unemployment in the UK and US and . . . in that ambiance the chump business should accomplish college advantage than the broad business.
“If you accept there’s never activity to be addition bread-and-er cycle, you could catechism our basic allocation. But those who accept bet adjoin bread-and-er cycles accept been accurate wrong. There will be addition bread-and-er aeon and this coffer is financially belted for that.”
Overall, Barclays generated a big jump in profits that exhausted bazaar expectations, abundantly due to lower impairments on chump loans.
The accumulation acquaint a net accumulation of £1bn for the quarter, against £583m a year ago, on revenues of £5.13bn. Pre-tax profits rose 32 per cent to £1.5bn. Analysts had accepted net profits of £784m and revenues of £5.2bn, according to a company-provided accord forecast.
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