New Barclays CIB chief tells staff: Don't be scared of risk
Barclays’ new corporate and investment bank boss has told staff he wants them to start taking more risk and has set up a new unit aiming to “sweat our assets better”.
The message to staff in recent weeks from Tim Throsby has been clear: years of restructuring and apologising for past mistakes are over and returns and efficiency need to improve to cement Barclays’ position as the leading challenger to US bulge bracket firms.
Throsby, a 50-year-old Australian poached from JP Morgan, in January started one of the biggest jobs at Barclays: running its new international business.
That includes the investment bank, corporate banking and its overseas credit cards and payments. It accounts for two-thirds of the bank’s revenues and profits.
Throsby has worked at some of the biggest financial firms, including Credit Suisse, Goldman Sachs, Citadel and JP Morgan, in most of the world’s major financial centres – Tokyo, Hong Kong, New York and London.
But even after heading JP Morgan’s equities business for the past four years, running Barclays International is a step up. The division has 36,900 staff and £650bn of assets.
Throsby is far from a conventional banker, according to people who know him.
He started his career as a trader and has specialised in running equity derivatives and had a brief spell out studying law at Oxford University.
The father of six is a strong supporter of gay rights and is renovating a famous homestead in New South Wales that was built for an ancestor 180 years ago, which he admitted wasn’t an economically sensible move.
Throsby will see familiar faces at Barclays from his six years at JP Morgan. Seven of the British bank’s most senior bankers are alumni of its US rival, including Jes Staley, the former head of JP Morgan’s investment bank who took over as Barclays CEO in December 2015.
Indeed, when Barclays announced in September it had lured Throsby, JP Morgan boss Jamie Dimon called Barclays chairman John McFarlane, according to industry sources. Dimon is reported to have called for the poaching to stop. Further details of the conversation were not known, but it was largely irrelevant - Throsby was the last piece of the top team Staley was putting together.
Among the other JP Morgan alumni he joins are finance director Tushar Morzaria (who preceded Staley), chief operating officer Paul Compton and chief risk officer CS Venkatakrishnan.
Dimon can at least console himself that Barclays wants some of what JP Morgan does; one of Throsby’s main tasks is to sell more investment bank products to corporate clients, an area where the US bank has been more successful than rivals.
Throsby is also in charge of other areas where he has less experience - but which may command early attention.
They include a US credit card arm that grew 14% last year and where the bank has hinted it could expand through acquisitions; a German “challenger” credit card; a major UK and European payments business; and a private bank that has gone through a difficult period and been cut back.
In early townhalls and meetings with staff Throsby has told them to be less risk-averse, people familiar with the matter have told IFR.
It is a nuanced message, however. He’s not raising risk limits, but Throsby has said traders and bankers are often significantly underutilising their limits after years of being in “survival mode”.
That echoes comments from Staley, and the pair are confident Barclays can challenge the big five US investment banks in areas it chooses to fight. Staley has slimmed down the investment bank and focused it on the two “home” markets of Britain and the US.
Throsby plans to juice up returns with a new unit managing capital and financial resources. The unit, called Financial Resource Management (FiRM), may seem like an internal redesign, but Throsby told staff it is a significant change.
Likely to include 30-50 staff, it will help with structuring and financing activity. Headed by Art Mbanefo, who joined Barclays’ investment bank in 2009 and was most recently head of markets in Europe and Asia, it will deal with complex aspects involving capital, leverage, risk weighted assets, funding and tax. (see story opposite)
The plan, Throsby has told staff, is for the bank “to sweat our assets better”. By assets, he means people, the balance sheet, stress measures, technology, and more.
LABOUR OF LOVE
Barclays will be Throsby’s seventh major financial firm, which has seen him work closely with some big names. They include former Barclays boss Bob Diamond at Credit Suisse, where Throsby also sat next to Brady Dougan.
Throsby joined JP Morgan in April 2010 as head of equity derivatives, and two years later was promoted to head of equities. He successfully built up its cash equities and electronic trading platform, where it had lagged rivals Morgan Stanley and Goldman Sachs.
His career in finance began as a trader at Macquarie, straight after studying economics at the University of Sydney. From there he went to Credit Suisse, and joined Goldman Sachs in 1995 as co-head of equity derivatives for Asia and Japan, before moving to Lehman Brothers in 2002, running its global equity derivatives business from 2004. A year later he was lured to Citadel by Ken Griffin to run its Asian business from Hong Kong, but left in November 2008 when the firm cut back in Asia.
Throsby took some time out and moved to Britain, where three of his children were at school, and went to Oxford to study law, which he’d always been interested in and had experienced in his finance career. He cut the course short when Dimon came calling.
Throsby has indicated his globetrotting is likely to end in Australia. Two years ago he and his Australian wife invested A$3.8m (US$2.86m) on Throsby Park, which was built in 1834 for one of his ancestors.
“There’s nothing economically sensible about this. It’s a labour of love on our part,” Throsby told Australian newspaper The Sun-Herald at the time.
“The plan for us now is to spend time turning it into a comfortable family home and we’ll move back here in a few years to live in it,” he said.