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Barclays really needs to hire some new M&A MDs

Barclays reported its third quarter results today, and things were ugly.

The bank has teased job cuts with the subtlety of a rowdy drunk, and looking at some of the corporate and investment bank (CIB)’s results, it’s not surprising to see why; M&A and debt capital markets (DCM) were down worse than any of the big American banks quarter on quarter.

The 47% decline in M&A revenue for Q3 2023 compared to Q2 2023 was particularly egregious. There's a good reason why Barclays' decline is so much worse than rivals'.

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Ten senior M&A bankers left Barclays for UBS at the start of summer. More left later. Many of those who left were in the US and had joined Barclays when it acquired Lehman Brothers in 2008. Most notable among them was Marco Valla, who was popular and the internal favorite to lead the investment bank, a role that unexpectedly went to Cathal Deasy, an Englishman unexpectedly hired from Credit Suisse instead. To make matters worse, Barclays reportedly verbally guaranteed bonuses to senior hires in 2022 that it decided not to pay after all.

As a consequence, the FT reported that 30 senior US bankers left and that Barclays was trying to “stem an exodus”. The scale of departures became so bad that the bank reportedly warned its departing bankers not to try and poach their colleagues.

Barclays therefore needs some new dealmakers, and it's already added quite a few. Barclays' own press releases show around 20 additions to its investment banking teams in 2023. In total, we count six hired into technology banking, four into ESG, and three into financial sponsors. The most recent additions include Deutsche Bank MD Ian Woods for the US industrials team and Jed Brody, who rejoined from Leerink Partners (formerly SVB) for healthcare team. Previous hires include Michael Del Giudice from Citi to its Financial Sponsors team and James Edmonds from HSBC as its global head of sustainable finance.

The problem for Barclays is that new M&A bankers take a long time to get up to speed. Banks like Deutsche and Jefferies have also been adding new senior dealmakers this year, but neither so far has much to show for it. At Jefferies, for example, 111 new investment banking MDs were accompanied by a 7% decline in investment banking revenues, year-on- year, in the first nine months of 2023. 

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AUTHORZeno Toulon

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