Clearing is an essential service across capital markets. But onerous capital regulation has made it a tough business proposition for much of the last decade. Many banks gave up and exited. But not Barclays. The firm’s unwavering commitment has seen its clearing business not just survive, but thrive.
Barclays has made new hires, drawn new clients and left its peer group behind in terms of growth. All of this makes it the worthy winner of Global Capital’s Clearing Derivatives Bank of the Year – Europe & Asia.
We provide services as one cohesive firm, leveraging the different parts of the business to best serve our customers. This culture of collaboration has been very important to our growth
“Our integrated and collaborative approach is critical to our success,” says Gary Saunders, global head of prime derivatives Services at Barclays. Clearing sits with futures & options, and FX prime brokerage within prime derivative services. This in turn is one of multiple integrated and interconnected Prime Services across the whole Barclays group. “We get positive feedback from clients about this integrated set-up,” says Saunders. “We provide services as one cohesive firm, leveraging the different parts of the business to best serve our customers. This culture of collaboration has been very important to our growth.”
Barclays has demonstrated consistent, material growth in its prime derivative services business, increasing its revenues by an average of 13% each year for the last four years, driven by strong investment in its people and product. According to Coalition Greenwich analysis Barclays prime derivatives services outperformed peers in 2021, when the bank reported 9% revenue growth, compared to a 6% drop in its peer group and a 9% decrease for US banks*.
That investment across the board has really helped show clients that they are getting a prime broker for all services
“That investment across the board has really helped show clients that they are getting a prime broker for all services,” says Craig Robertson, US head of prime derivatives services and quantitative prime services. “We've been able to invest in new tools that have helped us with broader business growth across prime in addition to clearing.”
Barclays marries its integrated approach to services with a keen focus on delivering tailored solutions to an increasingly diverse range of institutions. Bolstering its operations has broadened its client base, and the bank excels at adapting to different requirements.
We have a multifaceted business that’s able to adapt to different demands and put clients' needs at the forefront of everything we do
From cross-margining for hedge funds, to helping pension funds and asset managers who need to post a wide range of collateral. “It's never a one size fits all approach,” says John Dlubac, managing director, prime services. “We have a multifaceted business that’s able to adapt to different demands and put clients' needs at the forefront of everything we do.”
At the same time, the quality of Barclays offerings stem in part from a strategic focus on its particular advantages. The bank is careful not to dilute its expertise by being all things to all customers. “We play to our strengths,” says Saunders. “For Barclays, that’s in areas like rates, equities, credit and FX. We are consciously selective in the products we clear and who we clear for. That’s important from a risk management perspective, and to ensure that in the areas we do focus on we operate to an extremely high standard.”
We want to be there at the forefront to make sure we drive the industry forward to become more efficient and safer from an operational risk perspective
Similarly, although the firm prides itself on offering innovative solutions to customers, this never comes at the expense of consistency and reliability. “Clients see stability of service as a priority,” says Per Haga, global head of prime derivative services product at Barclays. “It’s no good producing fancy offerings if you can’t deliver that. A lot of time and effort goes into making sure there’s stability, timeliness and accuracy across the board.”
Barclays is invested not just in its own success, but that of the industry as a whole. Representatives from prime services are heavily involved in a variety of networks and initiatives aimed at helping the wider market develop. "It comes to a point where we need the whole marketplace to evolve," says Haga. "We want to be there at the forefront to make sure we drive the industry forward to become more efficient and safer from an operational risk perspective."
*Source: Coalition Greenwich Competitor Analytics, FY21. Revenue growth is based on the following banks: BofA Securities, Barclays, BNP Paribas, Citigroup, Credit Suisse, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, Nomura, Société Générale and UBS. Analysis is based on Barclays’ internal business structure and internal revenues.
