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Global Management Forum 2019

Barclays CEO says 'it's time' to reinvest in Asia after retreat

Head of UK bank says tech IPOs need to be assessed 'honestly'

Barclays Group CEO Jes Staley offers his views on Brexit and other matters on the sidelines of the Nikkei Global Management Forum. (Photo by Manami Yamada)

TOKYO -- Barclays "wants to grow in Asia" after shoring up its finances, CEO Jes Staley said, in a sign of confidence despite uncertainty over the impact of Brexit and global interest rate policies.

"If you are a universal bank, you must appreciate the economy of Japan, China and India," Staley said in an interview during the Nikkei Global Management Forum. "Now that we have stabilized Barclays and regained an acceptable level of profitability ... it's time to think about investing to grow the bank, as opposed to restructuring the bank. That is the new phase that we're in now."

Staley joined Barclays as CEO in December 2015. Shortly afterward, the bank embarked on a restructuring of its Asian operations, scaling back its cash equities business in the region as well as closing offices in South Korea, Taiwan, Malaysia, Indonesia, Thailand, the Philippines and Australia. It also sold off its wealth and investment management business in Singapore and Hong Kong.

Staley said the bank still has a major presence in Singapore and Hong Kong as well as Japan, where he said it is the second-largest brokerage on the Tokyo Stock Exchange.

Barclays' bullish view of the region comes despite lingering uncertainty surrounding Brexit and persistently low interest rates. Staley said the Brexit turmoil has constrained the U.K.'s growth and added that "the European Union and the U.K. realize that the time has come to make a decision, and to move forward one way or another." He stressed that "London will remain an important financial center" due to its large asset management industry and legal system.

"The financial markets are quite prepared for whatever type of Brexit, or no Brexit. The bigger question is more the supply chain and manufacturing."

He warned that aggressive monetary easing policies to stimulate economic growth are losing steam. "We all need to work toward improving productivity and improving GDP per capita, and having a negative savings rate is not a contributor," he said.

Meanwhile, the recent cancellation of U.S. office sharing company WeWork's initial public offering has raised questions over whether highly valued private technology companies can withstand the glare of the markets.

"I think the market has reacted to private valuations that in hindsight were significantly higher than what the public market would support," Staley said. "It means that investment banks like Barclays need to have a very dispassionate and honest assessment of how the public markets will value large private technology companies."

Despite concerns over valuations, few doubt the threat of disruptive online technology on the brick-and-mortar banking business. Staley acknowledged that payments "is the battlefield of finance." However, he said Libra, the cryptocurrency project led by Facebook that has seen a string of early partners leave, "clearly has the focus of regulators now."

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