If I had a dollar for every time I was asked about Barclays’s plans for Asia, I would quite easily meet their wealth threshold for new clients.
So I write this column almost as an extended WhatsApp group chat, some of the questions I pose here are a copy-paste job of what I received while others I am preempting (accurately, I hope).
Can They Go Back Into Asia?
Yes. The non-compete that bounds Barclays since it sold its wealth management business to Bank of Singapore lapsed at the end of last year.
Although the bank has been testing the feasibility of a second Asian inning since then, leadership changes at the group level meant the project did not have the sponsorship it would require. Until now.
Would They Go Back Into Asia?
No private bank with global ambitions can afford to ignore Asia where wealth is growing faster than anywhere else in the world. Barclays already has a few pieces of the puzzle in place with its investment bank in the region coupled with robust wealth management operations in India and the Middle East.
A pan-Asian wealth management platform would get a significant tailwind from these existing businesses – in Hong Kong, the bank would have a ready pipeline of clients in newly-minted millionaires referred by its investment bank; in Singapore, it could mop up the offshore assets of its onshore India clients. At the very least, these two revenue streams combined could cover costs as long as the model is kept lean.
Should They Go Back Into Asia?
This is an existential rather than a strategic question – does Barclays intend to continue to have a private bank? If it does, it will have no choice but to re-enter the Asian market.
Doing so will bolster revenues from stable but low-growth markets (like the U.K, though one might argue it is far from stable at the moment) that are the bank’s traditional stronghold. It would also help amortize the large investments in technology and platform upgrade all private banks have had to make in order to remain both compliant and competitive.
Could They Go Back Into Asia?
If I sell my beach house and I miss the beach terribly, I am free to build myself another one. However, I may have to spin a tale of how I sold high, knowing I could build back at a low – as much to soothe my own vanity as to safeguard my professional credibility.
Indeed, Barclays could argue that it has 225 million reasons (the price at which it transferred assets to Bank of Singapore) to build back its Asian platform because the sale to a local player as canny as Bank of Singapore was an affirmation of its business.
How Would They Go Back Into Asia?
Cost-light. Instead of trying to recreate the bells and whistles associated with its previous avatar in the region, the bank is likely to draw a few key bankers into its fold and build a framework around them that is sufficient to support them and consistent with its global footprint but is likely to shy away from any extravagant moves.
What it lacks in form it will likely make up for in substance with a product suite that covers offers everything from offshore mortgages to non-flow structured products and a willingness and ability to offer credit that Asian clients appreciate.
«Reach Out to Some Very Senior People»
Executives at search firms in Asia report that they have been able to «reach out to some very senior people» to discuss the possibility of working with Barclays, were it to re-establish an office in Hong Kong or Singapore. Karen Frank, CEO of Barclays Private Bank and Overseas Services, was in the region earlier this month «to meet regulators», according to a source who wishes to remain anonymous.
If work on building these two central pillars – of bankers and regulatory clearances – is afoot, it is only a matter of time before the rest of the building is ready.
