After a decade of contraction, Barclays is once again expanding its presence in overseas retail markets. David Roberts, chief executive of International Retail and Commercial Banking at Barclays, tells Michael Imeson about its latest moves.

Barclays has bounced back as a major force in international retail banking. Last year, it completed its £2.6bn acquisition of Absa in South Africa, bought the French wealth management businesses of Dutch bank ING and was a year ahead of schedule in the integration of Banco Zaragozano, the Spanish bank it acquired in 2003.

Barclays has a long history of providing personal banking services around the world, but by the late 1990s that part of its business had contracted.

Leading the comeback is David Roberts, chief executive of International Retail and Commercial Banking (IRCB). He has been in the job since January last year. Previously, he was in a similar role as head of private clients and international, and before that he was head of UK personal financial services.

“When I joined Barclays in 1983, we earned more money in retail and commercial banking outside the UK than in the UK,” he recalls. “International business is deep in Barclays’ DNA. But in the late 1990s the perception of us as an international bank was far stronger than the reality.”

Under the leadership of Matt Barrett, chief executive of the group from 1999 to 2004, the bank, one of the UK’s ‘Big Four’, set out on a new course. As well as boosting its UK business, it invested heavily in rebuilding its global franchise.

Growth strategy

The first phase of that was developing Barclays Capital into one of the top three to four investment banks in its chosen markets. This was followed by establishing Barclays Global Investors as one of the world’s leading institutional asset management businesses and the growth of Barclaycard International.

Then, in 2003, it moved deeper into the Spanish retail market, where it already had a presence.

“IRCB is therefore a key growth area for us,” says Mr Roberts. “Although there is still good growth in the UK economy, other economies have better prospects.

“Second, we have many capabilities that we can export to improve the competitiveness of banks we acquire or grow organically. They include business banking, cards, capital markets, wealth management, systems and platforms. Third, from a risk diversification perspective, it’s better to have multiple sources of earnings.”

Spread widely and wisely

“We are the fifth or sixth-biggest private bank in Spain, one of the top six in affluent banking in France, sixth or seventh in affluent banking in Portugal, the sixth-largest mortgage lender in Italy and we have a retail business in Germany,” he continues.

“In Africa and the Middle East, we are first, second or third in pretty much every market we play. And in the Caribbean, we have a 44% share of First Caribbean International Bank,” says Mr Roberts.

India now features prominently on the radar. “We have a big capital markets presence and are seeking to bolt on some corporate capabilities. Our classic market entry strategy is to start with investment banking and corporate banking, and then look for other opportunities,” he says.

The acid test

International banking is littered with failed expansion plans. “This is because banks acquire banks that don’t have strong business fundamentals, and then do not control them well enough,” asserts Mr Roberts. “International management is not for amateurs.”

Barclays therefore applies an “acid test”, says Mr Roberts: is the business that is to be acquired or developed the first choice for the customer, and is it the first choice for the best talent in the market?

“You can be successful if you can acquire or build organically a bank where customers want to go, and where the best people want to work. If you wrap around that good control and strategic coherence, you have a recipe for success.”

Mr Roberts believes that retail banking will become truly global in nature, with many seeking to emulate what HSBC, Citigroup, Barclays and a few others are already doing. But it is crucial to tailor services to local markets, he says. It is essential to “think global, act local”.

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