Barclays is looking to revive its European rates trading franchise following a period of poor performance and senior departures, as the UK bank sets about meeting ambitious growth targets in its markets division in the coming years.
The exit of Carl Scott, head of EMEA rates trading, is the clearest sign yet that senior management feels the need to shake up a business once considered a calling card for the firm. An internal Barclays memo seen by IFR, sent on March 25 shortly after bonuses were announced, stated that Scott had decided to leave the firm, without specifying a reason. Bloomberg first reported his departure.
A Barclays spokesperson declined to comment.
There is mounting pressure on Barclays to deliver growth in its European rates franchise. Senior management has raised the stakes for the business after identifying it as a crucial engine of growth in a February investor update, in which it outlined plans to boost returns across its banking operations. Markets chief Adeel Khan said European rates trading was one of three businesses Barclays is looking to grow, alongside equity derivatives and securitised products, that will help the bank increase its trading revenues by £500m over the next three years.
Such lofty targets strike a contrast with how the business has performed recently. Barclays has had a slow start to the year in European rates trading in what has proved to be a tricky market to navigate, according to sources familiar with the matter, following a disappointing 2023. Barclays struggled to make money in European government bond trading last year and sustained small losses in the fourth quarter when several firms stumbled.
There have also been other senior departures aside from Scott, including David Cross, former co-head of European flow rates trading, and Julien Ercole, a senior government bond trader.
"Last year, in European rates and equity derivatives, we did lose some market share due to idiosyncratic reasons. But traditionally, these businesses have been very large for us," Khan said during the February investor update. "In rates, we have our sterling franchise. We're also a primary dealer in 17 countries. And our corporate derivative franchise through banking brings us large structural advantages."
Khan said Barclays had been addressing gaps in its platforms over the last 12 months and had allocated sufficient capital to regain their lost market shares. "Given our historic market shares and the fact that our client franchise has stayed strong within these businesses, it gives us confidence that our plans are measured and prudent," Khan said.
Scott joined Barclays from non-bank market maker Citadel Securities in June 2022 with a mandate to reinvigorate the bank's European rates trading franchise. His recruitment was widely seen as confirmation that Barclays could still attract the top trading talent.
But the bank said it is still punching below its weight in a market that was a historical stronghold of the firm. Barclays said in its investor update it had a market share of around 7.5% in European rates trading, putting it outside the top five largest firms by revenue.