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Barclays CEO eyes China for investment bank expansion

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Barclays CEO eyes China for investment bank expansion

British bank Barclays pulled back heavily on Asia, eyeing China for investment bank’s expansion, said the bank’s CEO Jes Staley at the Morgan Stanley European Financials Conference on Tuesday, Bloomberg reported. Barclays is looking to build on its small presence in China, while continuing to invest in capital markets, an area that has brought in strong growth during the COVID-19 pandemic, Staley said. “Incrementally, we would like to put more into China,” he said.

Staley said, like a lot of foreign banks, the bank has to consider to open a broker dealer on the Chinese mainland. Without giving more details, he added, “Overall, we are in a good place”. Besides escalating engagement in China, the bank will continue to invest in Europe, particularly with their corporate bank, according to the CEO. He also hinted to return normality for dividends after a year without payments at the request of the UK‘s central bank the Bank of England.

Last month, the bank announced it was resuming dividends within limits set by the central bank, along with a 700-million pounds ($972 million) buyback. Suspending payments was “a very tough decision,” Bloomberg cited Staley as saying. “You want dividends to be predictable and you want them to improve progressively over time. We need to reset that plan”. In terms of dealing with bad loans during the pandemic, Staley said the bank will see how the economy performs this year before releasing 4.8 billion pounds it has set aside.

Staley also recommitted Barclays to a longstanding profitability goal that fell out of focus during the pandemic. “We are in a very good place over time to deliver our return on tangible equity target in the north of 10%,” he said.

At the same conference last year, finance director Tushar Morzaria said that reaching a double-digit return was very unlikely given the disruption caused by Covid-19.

Staley also hinted at a return to normality for dividends, after a year without payments at the request of the Bank of England. Barclays last month announced it was resuming dividends within limits set by the central bank, along with a buyback of as much as 700 million pounds.

Suspending payments was “a very tough decision,” Staley said. “You want dividends to be predictable and you want them to improve progressively over time. We need to reset that plan”.

Asked whether Barclays might release some of the 4.8 billion pounds ($6.7 billion) it set aside for bad loans during the pandemic, Staley said the bank will see “how the economy rolls out this year”.

(BLOOMBERG)

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