Barclays may drop 2.5k least profitable investment banking clients


11/29/2023

According to the Financial Times, which cites sources, the British bank Barclays is looking into the possibility of stopping to serve more than 2,500 of its least profitable investment banking clients.



Money Bright
Barclays' investment banking division is currently serving over 10,000 clients. With a loss of less than 10% of the division's revenue, an aggressive reduction in their number might enable the release of risk-weighted assets valued up to 20 billion pounds ($25.3 billion).

Capital needs are calculated using risk-weighted assets. Furthermore, increasing shareholder returns should come from cutting assets or shifting them to more lucrative business units.

The retail banking and credit card segments would benefit from a 25% reduction in the trading assets of the investment banking division, according to Barclays management. But the actions are probably going to be less severe because the trading business leaders are objecting.

source: ft.com