Barclays to boost hiring and lending in Dubai

Anthony Jenkins, Barclays chief executive.
Anthony Jenkins, Barclays chief executive.

BARCLAYS will boost hiring and increase lending at its corporate banking business in Dubai as the UK’s second-largest bank by assets seeks expansion in emerging markets. The bank, which is cutting 7 000 investment banking jobs over the next two years, planned to increase the number of corporate bankers in the Gulf by more than 10 percent this year, Rezwan Mirza, the head of that business in the United Arab Emirates (UAE) and Persian Gulf countries, said this last week). He declined to give more details on banker numbers.

Mirza said operations in the six-nation Gulf Co-operation Council would not be affected by the plan announced on May 8 to cut a quarter of the employees at the investment bank and 19 000 jobs across the company.

Chief executive Anthony Jenkins is focusing on cutting costs, rebuilding relations with regulators and responding to shareholder demands to curb bonuses. Barclays is pursuing growth in emerging markets in Africa, while scaling back its investment bank in the US and Asia. The bank was injecting fresh capital into its African business as returns from the continent exceeded its 2016 profitability targets, Stephen van Coller, the head of Barclays’s Absa Capital unit in South Africa, said this month.

Barclays agreed last month to sell its retail banking business in the UAE to Abu Dhabi Islamic Bank for 650 million dirhams (R1,8 billion). Mirza said the bank would maintain its branch presence in Dubai and Abu Dhabi for its corporate clients in the UAE.

Economic growth in the Gulf Arab region is accelerating amid higher oil prices, increased infrastructure spending by states and a revival in property prices.

The UAE’s economy expanded 4,8 percent last year, the fastest pace in seven years.
Mirza said companies were expanding into places such as Africa, creating opportunities for Barclays. The London-based bank had increased lending to trade finance customers by more than 15 percent this year.

“Pretty much everyone I meet in the region says that their business is growing,” Mirza said. “When your business is growing, you need to grow your working capital.”

The bank expected to see more borrowers tap the loan market to refinance existing debt facilities and also seek fresh capital.
Meanwhile, the Financial Times reports that three former Barclays traders appeared in a London court last week, becoming the first Americans to face criminal charges in the sprawling global probe into  alleged widespread manipulation of the Libor interbank lending rate.
Jay Merchant, 43, Alex Pabon, 35 and Ryan Reich, 32, were all charged by the UK’s Serious Fraud Office with a count of conspiracy to defraud between June 2005 and September 2007.

The SFO alleges the three fixed income traders “conspired together with other persons to defraud Barclays PLC and its associated entities”.
All three appeared voluntarily in Westminster Magistrates Court in London, rather than forcing the SFO to seek their extradition from the US.

They sat quietly in the dock and spoke only to confirm their names and dates of birth.
They are the first US-based bankers to be charged in an investigation that involves at least 10 authorities on three continents. Libor is the crucial interbank lending rate that helps determine the price of $350 trillion of products, from home loans to complex derivatives
They were granted bail on the condition they notify the SFO of any international travel and deposit a £50 000 security within five days.

James Hines for the SFO said the authority had no objections against granting bail.
None of the three former Barclays traders has formally entered a plea to the charges.

Mr Merchant is a former director of dollar fixed-income swaps while Mr Reich is a former trader of dollar interest-rate derivatives and Mr Pabon worked in Mr Merchant’s team.

Their case is focused on the alleged rigging of dollar Libor.
The SFO alleges the Mr Merchant, Mr Reich and Mr Pabon conspired with other Barclays employees to defraud in that they “dishonestly agreed to procure or make submissions of rates by Barclays, a panel bank, into the Dollar Libor setting process which were false or misleading in that they . . . were intended to create an advantage to the trading positions of employees of Barclays and . . . deliberately disregarded the proper basis for the submission of those rates thereby intending to prejudice the economic interests of others”.

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