London-based Barclays has delivered its best quarter ever in Asia this year, said regional head of markets Hossein Zaimi, with strong contributions from its financing business.
Barclays’ global markets revenue in Asia, which includes the intermediation business, has doubled since 2019, according to a «Bloomberg» report citing unnamed sources.
The share of contribution from the financing business nearly doubled compared to a year ago and is now close to matching the overall financing business’ 32 percent contribution to global revenues.
Since 2019, the British lender also increased its sales and trading headcount by 20 percent, as of December 2022.
Hedge Funds, Private Banking
The Asia business is being driven by prime financing demand from Asian quantitative and multi-strategy hedge funds as well as cross-border structured products demand from private bank clients, including US equity-linked derivatives, said Hossein Zaimi, the region's head of markets.
Following downsizing in the region in 2016, Barclays has sought to revive its markets business in Asia since 2018. The aim was to provide financing to Asia clients buying dollar-denominated products and overseas clients seeking access to Asia stocks, currency and fixed income products, Zaimi added.
In addition, the bank has also bolstered its offering in corporate derivatives and macro products, such as bond forward contracts.
Record Quarter
Barclays’ global business is increasing focus on financing to reduce reliance on volatile trading revenue. It is targeting a return on tangible equity of at least 10 percent.
«If you don’t achieve that return in this market at this bottom of the cycle, you don’t have the oxygen, you die, or you don’t go very fast,» said Zaimi, adding that the financing business has helped the bank in 2023 to deliver its best quarter ever in Asia.
«Once you don’t have the right return, your shareholder will tell you either cut capital, or stop investing in tech.»
