Barclays PLC

NYSE:BCSUnited States

By Joe Wallace Barclays Chief Executive C.S. Venkatakrishnan is just starting on the toughest part of his overhaul: Proving to shareholders that the lender can slug it out with American investment banks. "I've always said this is the hardest part of our story," the Barclays CEO, who goes by Venkat, said in an interview in London. "The big U.S. banks are not going to give up their mandates willingly, or easily." Barclays fleshed out details this week for how it plans to shift the focus of its investment-banking business. A key aim: Earn more from asset-light work advising on mergers and public offerings, on top of its historic expertise in underwriting bond issues. A key goal of the wider revamp, first outlined in February, is to tie up a smaller proportion of capital in its broader investment bank, which spans corporate advice and executing trades, in favor of retail, corporate and private banking, and U.S. credit cards. The Barclays model has been a tough sell to investors. The investment bank's unpredictable performance is one reason why Barclays, despite a 40% rise in its shares this year, still trades at a big discount to the net value of its assets. Barclays knows it can't compete with the likes of Goldman Sachs on every deal, but aims to build niches of expertise in areas including telecoms, healthcare and the energy transition. "We pick our spots," Venkat said, noting his bank's role advising on TPG's purchase of AT&T's stake in DirecTV and the purchase by India's Bharti of a stake in U.K. telecom group BT. Barclays doubled down on Wall Street during the global financial crisis, buying most of the bankrupt Lehman Brothers in 2008. It earns most of its investment-banking fees in the Americas. "This feels like an American investment bank in New York," he said. "It's the DNA of the old Lehman trading and banking cultures." The trouble is, only about 30% of U.S. investment-banking clients also do transaction-banking business with Barclays, compared to more than 90% of U.K. clients. Venkat said Barclays will have "proper adult conversations" with customers to get them to do more with the bank. "We were getting flabby," Venkat said, devoting too much capital to clients who weren't generating enough business. "We were putting in money and not getting any returns from our clients because they were single-use clients." This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage). (END) Dow Jones Newswires October 04, 2024 12:36 ET (16:36 GMT)