British bank Barclays, which snapped up Lehman Brothers' U.S. business a year ago, aims to be a consistent top-five player in U.S. equities and says it is not done with expanding there.
Barclays Capital's president, Jerry del Missier, said late on Tuesday the bank was expanding in Asia and Europe but also expects to capitalize on growth sectors in the United States, including prime broking and U.S. local government bonds.
BarCap had long been strong in U.S. debt capital markets, commodities and fixed income, but it was the deal to buy Lehman's core U.S. dealer-broker that gave it the platform to leapfrog competitors in equities and M&A.
We don't think we are done in the U.S. We think this still represents a tremendous strategic opportunity -- the businesses we have acquired, combined with the businesses we have built put us in a terrific position, he told Reuters in an interview.
He said Barclays is taking advantage of a retreat by rivals in prime services -- brokerage services typically aimed at hedge funds and traditionally dominated by standalone investment banks -- and saw significant growth in local government bond issuance.
Governments right now need a lot of money and they are going to be tapping the market. Again we are very well placed to be a significant player in the public finance market, he said.
Barclays has crept up to number two in global debt capital market league tables in part as a result of the Lehman deal, but it has yet to feel the impact in equity and M&A. Del Missier said European and Asian growth would help change that.
BarCap currently ranks 11th in global M&A after advising on 49 deals worth $124 billion, according to Thomson Reuters data, including work for drug group Pfizer on a $68 billion takeover of Wyeth.
We are still not up and running in Europe and Asia, and especially in Europe -- that will have an impact on global league tables. I am confident you will start to see the results come through pretty quickly, he told Reuters.
Here in the US it took us a little while to get restarted, but if you look at the run rate, particularly in equities, we are back in the thick of things. I am very confident we will be a consistent top-five player in U.S. equities.
Barclays withdrew from equity and M&A just over a decade ago because it lacked scale, particularly in the United States, but the bank now says these less capital intensive businesses will add 5 billion pounds ($8.3 billion) of annual revenue over the medium term.
Lehman Brothers' Asian business was largely bought up by rival Nomura but Barclays said it would continue to grow in the region and expects to reap the benefits of its bet on the Japanese economy in 2010.
Asked whether the bank would use acquisitions to grow in Asia, del Missier said: We never say never but ... organic growth is something we know very well. That will be our focus.
Del Missier had said in May that he aimed to hire more than 750 staff as part of BarCap's plan to win leading positions in equities and M&A advisory.
He said on Tuesday the bank had hired 700 staff to date, though recruitment has slowed as the market improves.
We are back to a more normal (recruiting) environment, but we will certainly continue to focus on attracting the best talent. We have done a significant portion of the building of European and Japanese equities business, and a fair bit of hiring around M&A, he said.
Barclays Capital announced earlier this week it had hired veteran Rothschild M&A banker Stefano Marsaglia to chair its financial institutions group.
(Editing by John Stonestreet and Greg Mahlich)