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Asia remains 'core market' for Barclays -- Asia Pacific co-head

Restructuring in region focuses resources on four major markets

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YOKOHAMA, Japan -- Despite cutting a large number of jobs and shutting down several offices across the region, Asia remains a core market for Barclays, its Asia Pacific co-head Jaideep Khanna told the Nikkei Asian Review.

2016 was a year of restructuring in Asia for the U.K.-based bank. It announced in January that it would ax its cash equities business in Asia and slash 1,000 jobs in the region. It also said it would close offices in South Korea, Taiwan, Malaysia, Indonesia, Thailand, the Philippines and Australia. In November, it sold off its wealth and investment management business in Singapore and Hong Kong to Singapore's Oversea-Chinese Banking Corp.

"We restructured our Asian business to focus more closely on four markets, Japan, Hong Kong, Singapore and India," Khanna said. "The reason why we did it was because we believe the Asian opportunity is large, but in the current environment it is important for us to be more focused on the markets where we have critical mass, and where we believe we can grow."

The co-head said that Barclays was now "beginning to think about how we can grow in these markets," as the bank can now redeploy the freed up management and capital to these four areas.

"Where we will grow, we will grow in the businesses that we already have. We have a strong global markets business. We have a corporate finance advisory business, and the capital markets business. These businesses will grow," he said. "We are here in Asia, we want to grow in Asia, and it is a core market for us."

Barclays Asia Pacific co-head Jaideep Khanna

Asia is where Khanna, who was in Yokohama in conjunction with the Asian Development Bank's annual meeting, sees "intrinsic growth," but he stressed that the bank's target in the region was a result of being "client focused." He said Asia is intrinsic to the plans of Barclays' global clients. "If you think about our key global clients, the large multinationals housed in the U.S. and the U.K., they look to Asia for growth opportunities and business opportunities," Khanna said. "To be able to follow them into markets and serve them in markets where they have interest is very important for us."

Khanna said that, equally, there were Asian clients who have significant interest in the U.K. and the U.S. But serving them entails a much more competitive playing field, especially when global financial institutions with deep Asian relationships, such as HSBC and local financial institutions, are increasingly becoming active.

"The proposition that we offer is a very deep understanding of the U.S. market," Khanna said. "We acquired the Lehman business in 2008 and have grown that today as an investment bank. We are among the top five, and a very solid U.S. franchise, both across advisory M&A [and] capital markets, and the quality of that platform is of great value to our Asian customers." 

Khanna also noted that its position as a high-street bank in the U.K. as well as its investment banking business in the country also gives Barclays an edge over competitors. "When we are to compare whether it is our U.S. business or U.K. offering to any of our competitors ... We view our capabilities as competitive advantages relative to some other banks that have more established Asian business or historical Asian business," he said.

"The strategy is consistent across all of the geographies in Asia Pacific ... If you have a large borrowing requirement in Hong Kong, HSBC or maybe Standard Chartered is probably a better bet. But if you are looking for insights into the U.K. and U.S., you come to Barclays, and Barclays has something that it can offer."

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