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Barclays (BCS) on Expansion Spree, Gets Australia License
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In sync with its efforts to expand further into high-growth markets, Barclays (BCS - Free Report) has received the license to operate as a foreign authorized deposit-taking institution (ADI) from the Australian Prudential Regulation Authority (“APRA”). Barclays Bank PLC Australia Branch plans to start operating effective April 2022.
Jaideep Khanna, Head of Barclays, Asia Pacific, said, “Australia presents tremendous growth opportunities and is an important financial services market in the region. This foreign ADI license reinforces our commitment to Australia and enables us to proactively serve our clients with our global Corporate & Investment Bank platform, supporting their cross-border growth ambitions even further.”
Establishing a retail branch in Sydney will help Barclays grow its client base and provide services to its corporate and institutional clients in the country.
Barclays has been offering global financial solutions to local clients since re-establishing its office in Australia in 2018. The company operates in the Asia Pacific region through its corporate and investment bank division. It has a presence in major markets, including Australia, China/Hong Kong SAR, India, Japan and Singapore.
Barclays has been increasingly focusing on expanding in the Asia Pacific region. This August, the bank said that it is seeking to invest more than $400 million in India to accelerate growth in its corporate, investment and wealth management businesses. Also, the company is planning to hire staff in its investment banking and wealth management operations across the region in 2022.
Tough Competition
Amid expansion efforts in Asia, Barclays is expected to face tough competition from its peer like HSBC Holdings (HSBC - Free Report) . The company has also been seeking to expand operations in the Asia markets, focusing mainly on China. HSBC is already ahead of its hiring targets for the China retail wealth management business.
This February, HSBC announced that it is on an expansion spree and plans to hire 5,000 wealth planners in Asia over the next five years. It also announced plans to inject $3.5 billion worth of capital into the region. Further, HSBC announced plans of shifting capital from the underperforming businesses in Europe and the United States to invest $6 billion in Asia over five years. The capital will primarily be used to strengthen HSBC’s wealth management business in mainland China, Hong Kong, Singapore and other parts of the region.
Barclays has a very small presence in China as it operates through a single branch and only one representative office. Thus, global banks, including UBS Group AG (UBS - Free Report) and Citigroup (C - Free Report) , which have established a stronghold over China, are expected to give Barclays a tough time in trying to beef up its operations in the country.
In China, Citigroup plans to form a wholly-owned investment bank and has recently submitted its application for a license to the China Securities Regulatory Commission. Further, Citigroup is mulling over applying for a futures license in the coming months. It is expected to hire more than 100 people in China over the next two years to support its onshore expansion plans.
Further, UBS Group has been mulling over increasing its stake in the China securities joint venture. The Swiss banking giant, which became the first foreign bank in 2018 to get a nod for majority control of a joint venture (JV) in China, has been long-planning to acquire another 16% of the pie, boosting its control to 67%.
Also, UBS Group is in talks with China Life Insurance Group to form an asset management joint venture in the country, per a Reuters report. As part of UBS Group's initiative to reinforce its presence in the world's second-largest economy, it will hold a majority stake in the business unit. If finalized, this will be China's first foreign majority-owned asset management JV.
Our View
Barclays has been undertaking efforts to improve efficiency over the past few years. These have been bearing fruit, as evident from a fall in the company’s total expenses. Also, the bank’s efforts to simplify operations and focus on core businesses have been impressive. It has restructured its business lines into two divisions and has divested/closed several non-strategic and less profitable operations globally.
Driven by these initiatives, Barclays remains well-positioned for bottom-line growth in the near term.
Over the past year, shares of Barclays have gained 24.2% compared with 11.7% rally of the industry.
Image: Bigstock
Barclays (BCS) on Expansion Spree, Gets Australia License
In sync with its efforts to expand further into high-growth markets, Barclays (BCS - Free Report) has received the license to operate as a foreign authorized deposit-taking institution (ADI) from the Australian Prudential Regulation Authority (“APRA”). Barclays Bank PLC Australia Branch plans to start operating effective April 2022.
Jaideep Khanna, Head of Barclays, Asia Pacific, said, “Australia presents tremendous growth opportunities and is an important financial services market in the region. This foreign ADI license reinforces our commitment to Australia and enables us to proactively serve our clients with our global Corporate & Investment Bank platform, supporting their cross-border growth ambitions even further.”
Establishing a retail branch in Sydney will help Barclays grow its client base and provide services to its corporate and institutional clients in the country.
Barclays has been offering global financial solutions to local clients since re-establishing its office in Australia in 2018. The company operates in the Asia Pacific region through its corporate and investment bank division. It has a presence in major markets, including Australia, China/Hong Kong SAR, India, Japan and Singapore.
Barclays has been increasingly focusing on expanding in the Asia Pacific region. This August, the bank said that it is seeking to invest more than $400 million in India to accelerate growth in its corporate, investment and wealth management businesses. Also, the company is planning to hire staff in its investment banking and wealth management operations across the region in 2022.
Tough Competition
Amid expansion efforts in Asia, Barclays is expected to face tough competition from its peer like HSBC Holdings (HSBC - Free Report) . The company has also been seeking to expand operations in the Asia markets, focusing mainly on China. HSBC is already ahead of its hiring targets for the China retail wealth management business.
This February, HSBC announced that it is on an expansion spree and plans to hire 5,000 wealth planners in Asia over the next five years. It also announced plans to inject $3.5 billion worth of capital into the region. Further, HSBC announced plans of shifting capital from the underperforming businesses in Europe and the United States to invest $6 billion in Asia over five years. The capital will primarily be used to strengthen HSBC’s wealth management business in mainland China, Hong Kong, Singapore and other parts of the region.
Barclays has a very small presence in China as it operates through a single branch and only one representative office. Thus, global banks, including UBS Group AG (UBS - Free Report) and Citigroup (C - Free Report) , which have established a stronghold over China, are expected to give Barclays a tough time in trying to beef up its operations in the country.
In China, Citigroup plans to form a wholly-owned investment bank and has recently submitted its application for a license to the China Securities Regulatory Commission. Further, Citigroup is mulling over applying for a futures license in the coming months. It is expected to hire more than 100 people in China over the next two years to support its onshore expansion plans.
Further, UBS Group has been mulling over increasing its stake in the China securities joint venture. The Swiss banking giant, which became the first foreign bank in 2018 to get a nod for majority control of a joint venture (JV) in China, has been long-planning to acquire another 16% of the pie, boosting its control to 67%.
Also, UBS Group is in talks with China Life Insurance Group to form an asset management joint venture in the country, per a Reuters report. As part of UBS Group's initiative to reinforce its presence in the world's second-largest economy, it will hold a majority stake in the business unit. If finalized, this will be China's first foreign majority-owned asset management JV.
Our View
Barclays has been undertaking efforts to improve efficiency over the past few years. These have been bearing fruit, as evident from a fall in the company’s total expenses. Also, the bank’s efforts to simplify operations and focus on core businesses have been impressive. It has restructured its business lines into two divisions and has divested/closed several non-strategic and less profitable operations globally.
Driven by these initiatives, Barclays remains well-positioned for bottom-line growth in the near term.
Over the past year, shares of Barclays have gained 24.2% compared with 11.7% rally of the industry.
Currently, Barclays carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.