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Are Barclays’ investment bankers about to report a horrible quarter?

Barclays equities and advisory

Trouble within?

What’s been happening at Barclays’ investment bank? We’re asking because the bank has just replaced its EMEA head of M&A and Chirantan Barua, senior analyst at Bernstein Research, has put about a nasty chart suggesting some of Barclays’ preferred business areas didn’t do too well in the most recent reporting period.

Chirantan’s chart looks like this.

Bernstein header

Barclays investment bank Bernstein Q2

Source: Bernstein Research 

Fundamentally, he thinks that with the exception of ‘lending’ every area of Barclays investment bank had a bad second quarter compared to the second quarter of 2014. This includes equities and investment banking (advisory), the US-based units which are supposed to be leading the unit into the future.

If Chirantan’s right, it won’t be the first time Barclays’ advisory and equities businesses have had a poor quarter – they didn’t do too well in the first three months of the year either. As a reminder, Morgan Stanley’s equities business achieved a 27% year-on-year revenue increase in Q2, while Goldman Sachs M&A revenues were up 62% in the same period. 

So, what’s up with Barclays? Barua attributes his poor prognostication to comparables. Barclays’ equities and M&A businesses did well in the second quarter of 2014 and the bank will struggle to match that.  Either way, it doesn’t look good in a business that’s fighting to justify its existence.

(Photo credit: Roger)

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