Barclays (BCS) to Hire 100 Staff to Expand Private Banking
In an effort to attract more business from wealthy clients, Barclays PLC BCS is set to hire about 100 new people in its private bank. The news was first reported by Reuters.
According to people familiar with the matter, the bank is looking for relationship managers to attract and serve customers, and administrative and risk management staff to provide necessary support.
This is the second time that the British lender has made an effort toward expanding its private wealth management business in the last few years. The first attempt was made in 2010 when the bank started an initiative, Project Gamma, a five-year scheme, under which it aimed to double its assets under management and increase profits.
However, the bank could not meet growth targets and hence was forced to fold its wealth management business back into its retail bank in 2014.
The current effort, however, will be different from the previous one as Barclays now wants to focus more on improving profits rather than assets. Also, it will try to strengthen its relationship with the investment bank division.
According to sources, the lender plans to strengthen staff in its private banking hubs in London, Dublin, Geneva, Monaco, India, Dubai, Jersey, Guernsey and the Isle of Man.
The new staff will work for Barclays Private Bank & Overseas Services, a part of Barclays's wealth division, which is under the Barclays International unit.
A Barclays spokesman said, “In line with Barclays International's overall strategy we are positively investing in Private Bank & Overseas Services."
Emerging markets like India and China are witnessing a large number of flourishing millionaires. Tempted by this, various banks across the globe are striving to expand into private wealth management.
However, because of the stringent regulations and the reluctance of customers to change their banking relationship, lenders have faced various obstacles.
For example, despite witnessing a rise in assets over the past few years, the world's largest wealth manager UBS Group AG UBS has posted broadly flat revenues.
Seb Dovey, managing partner and private banking expert at Scorpio Partnership said, "It's an unforgiving and brutal market at the moment, with a very expensive delivery model and competition that's driving pricing down."
Apart from Barclays, some other banks like Credit Suisse Group AG CS and Standard Chartered PLC SCBFF are also trying to expand private wealth management services for wealthy clients.
Notably, Barclays has been striving to simplify operations and focus on core businesses. Such efforts are likely to reduce costs, going forward, thus improving profitability. However, the company has been facing pressure on revenues owing to weak global economic recovery and uncertainty related to Brexit.
Shares of the company gained 4.5% in the last one year, underperforming the 19.5% growth for the Zacks categorized Banks - Foreign industry.
Currently, Barclays carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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