Date
18 December 2017
When WH Group failed on its first attempt to list in Hong Kong, it was a case of too many bookrunners spoiling the IPO. Photo: WH Group
When WH Group failed on its first attempt to list in Hong Kong, it was a case of too many bookrunners spoiling the IPO. Photo: WH Group

Barclays investment bank trims list of potential Asia clients

Barclays’ investment bank in Asia has pruned its list of potential clients by almost one-third, the Financial Times reported.

The move is part of the British bank’s drastic restructuring since May of its underperforming investment banking business, including cutting a quarter of its global workforce.

In Asia, 5 percent of the workforce has been cut, although the bank is now hiring again.

Reid Marsh and Patrick Kwan, appointed co-heads of Barclays’ investment bank in Asia during the revamp, told the newspaper they have undertaken “merciless client selection” and cut their coverage list by 30 per cent — but left untouched any clients with whom the bank has already built up a close relationship.

“What we mean is those we were covering but where we haven’t earned any fees, or where the fees don’t fit in the strategy,” Kwan said.

Initial public offerings in the region, notably Hong Kong, have notoriously engaged ever-larger rosters of bookrunners, where bankers will admit privately the work is not profitable but is done simply to boost the bank’s position on league tables. 

Earlier this year, WH Group appointed a record 29 banks, including Barclays, for a US$6 billion IPO that ultimately failed, partly because the listing hopeful had too many advisers.

Marsh said Barclays has now filtered potential clients by their interest in the bank’s global reach, the likelihood that they would use more than one product the bank offers and their “attitude and propensity to pay fees”.

Barclays’ Asian investment bank produces a fifth of the division’s global revenues, Andrew Jones, co-chief executive for the region, said in Singapore last month.

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