Barclays’ head of banking for Europe, the Middle East and Asia-Pacific tells Kat Van Hoof about his ambitious growth targets and where he sees business opportunities for the year ahead.

Reid Marsh

Reid Marsh, Barclays

Barclays ended 2018 on a high, despite the rough patch for European bank stocks in general, having reached its target of double-digit top-line growth. “We exceeded our goal, ending up in the mid-teens,” says Reid Marsh, head of banking for Europe, the Middle East and Asia-Pacific. Mr Marsh was appointed in this role in September 2017, and the investment banking unit has been on a growth trajectory ever since.

But just as the UK bank is gathering pace, so too is activist investor Sherborne’s campaign to push for the corporate and investment bank (CIB) to be unwound. Edward Bramson, who heads up the fund, is pushing for a Barclays board seat and sent an open letter outlining the issues around leverage and profitability for the investment bank. Sherborne built up a stake of about 5% over 2018, but up until this point kept discussions private. The gloves are off, it seems.

Career history: Reid Marsh  

  • 2017 Head of banking for Europe, Middle East and Asia-Pacific, Barclays
  • 2017 Co-head of banking for Asia-Pacific, Barclays
  • 2014 Co-head of banking Hong Kong, Barclays
  • 2010 Executive chairman of the global industrials group, Barclays
  • 2001 Co-head of European industrials, Citigroup

Undaunted, Mr Marsh is confident his strategy for investment banking and capital markets is the right one for facing the challenging environment in Europe. “There is good board support for the investment bank, the balance sheet is strong and we are commercially on the front foot,” he says. Barclays is playing into the political narrative of having at least one non-US top investment bank. “Whether I’m in Beijing or Stuttgart, it’s a recurring theme that clients want us to succeed in that.”

Progressing the revenue mix

Despite a challenging capital markets environment over the past 12 months, Barclays has reported growth for the past four consecutive quarters. CIB played an important part in this, as revenues from equities and fixed-income were up by almost 20% in the third quarter of 2018. Mr Marsh also points to M&A advisory and leveraged finance as bright spots in 2018, with business up around 70% on the previous year for both. “Underpinning the good year was the equity solutions business, which includes share financing and derivatives and such, where Barclays came from outside the top 10 to finish at number 4,” says Mr Marsh.

The bank has progressed in terms of revenue mix, with M&A, equity capital markets and leveraged finance now making up more than 50%. About seven years ago, virtually none of Barclays’ CIB revenue came from these businesses, Mr Marsh notes. The bank is actively investing in this part of the business. “In the M&A activist department we have developed a model, predicting which companies are likely to be the subject of an activist campaign,” he says. The programme scrubs public documents and news coverage to predict the outcome of proxy fights. Predictive analytics are also deployed to gauge the share price reaction to certain events, which can be used as an additional decision-making tool.

Mr Marsh highlights what he calls Barclays’ “successful luring programme”, under which the bank has hired close to 20 directors and managing directors over the past year from competitors such as JPMorgan, Goldman Sachs and Deutsche Bank. “We have targeted 20 to 25 key strategic hires for 2019, which will support progressing the mix of revenues,” he says.

Operational changes

Mr Marsh has been pushing to get more sector content into the CIB’s country coverage. He converted reporting lines of several local bankers into sector teams, so that they develop sector expertise, from being “concierge country bankers”. The collaborative culture extends to cross-product team-ups, whereby bankers can talk to clients about other solutions and bring in colleagues with the appropriate knowledge. 

“We have removed any culture of internal competition for revenues, so we don’t talk about fee-splits. Our focus is on co-ordinating the best result for the client,” he says, adding that this approach extends to compensation. “It’s sector, product and country-agnostic, with a common bonus pool.”

Working for Citigroup for 15 years prior to joining Barclays in 2010 taught Mr Marsh the importance of bringing the corporate bank closer to the business. “In 2018 we co-located bankers, engaged in joint planning and moved some Chinese walls around, which has led to a much more joined-up and solutions-driven approach to clients,” he says. That strategy is already bearing fruit, with its UK mid-market revenues – where the corporate bank is the main point of contact – up 70%. “A significant amount of the UK GDP goes through our pipes, which gives us a lot of data to help predict trends and take back to clients.”

European expansion

Barclays is a top three player in terms of UK market share for CIB, finishing 2018 in second place after Goldman Sachs. “The key is to defend our share in the UK and continue to grow on the continent, and that is really the holy grail,” says Mr Marsh. The bank increased its market share by 40 basis points in Europe and moved up two spots to fifth place in Dealogic’s ranking of CIB market share in Europe, including the UK.

Mr Marsh was based in Hong Kong for several years from 2014. “In Asia, geographical collaboration is [essential]; the whole business is geared towards a cross-border strategy,” he says. “Sitting in London but also covering Asia has given me an opportunity to reinforce even more strongly that global connectivity.”

In this spirit, Peter Kimpel, who returned to banking after a four-year stint as CFO at tech investment company Rocket Internet, was hired as head of Germany. While Germany and France offer the most room to grow, Barclays also has a good footprint to expand business in Italy, Iberia and the Netherlands, according to Mr Marsh. A third priority is the Nordics, where the bank is opening an office and hiring staff to create critical mass.

Barclays announced in January that its hub in Dublin will house its pan-European business and is expected to be fully operational by March 2019, in anticipation of Brexit. “As a firm we have prepared for a hard Brexit just to be prudent,” says Mr Marsh. While the uplift for banking is modest, across the firm a large number staff have needed to be moved around. “From a client perspective, the real implication has been the protracted period of uncertainty, which has made some clients more risk-averse and defer decisions.”

Further afield, Barclays has a good foothold in the Middle East, where it has been voted best foreign investment bank several times. “The other piece under this remit is South Africa, where we’ve reopened a representative office to build up business post our Barclays Africa stake reduction,” says Mr Marsh. While Barclays aims to preserve optionality on further emerging markets business, particularly in Russia and Eastern Europe, the activity is centred around companies rather than countries, he adds.

Hotspots for 2019

For the new year, Mr Marsh is aiming for another double-digit increase in revenues, if markets allow. Although the year ahead is likely to include its fair share of volatility, Mr Marsh sees potential for growth in several areas. Risk solutions, which includes handling interest rate and currency exposure, had a very strong finish in 2018. The importance of this business will only increase in 2019, and the bank already has a strong pipeline, according to Mr Marsh.

He foresees more activity in the public to private market thanks to the amount of money private equity firms are sitting on. “As a corollary to that, Asia will continue to pivot into Europe because of politics with the US and take advantage of impaired share prices,” he says. The main opportunity in capital markets will also be on the private side in the shape of private placements and private debt, according to Mr Marsh.

“The green investment agenda has become more important, with increased issuance of green bonds and clients coming to us to for risk assessments and corporate reviews in this context,” Mr Marsh says. Rhian-Mari Thomas was appointed as the global head of green banking in September 2018. The demand for green investment products is booming, leading Barclays to develop a green mortgage product with preferential interest rates for energy-efficient homes. This can then be packaged up into a CMO and sold to investors as a green asset, another pointer to Barclays’ future direction.


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