Barclays Australia retreat reignites job cuts, local exits debate

The swift retreat of Barclays from the local market has fuelled expectations that other firms will downsize or revisit plans to withdraw from Australia.

In London on Thursday, Barclays' chief executive Jes Staley outlined an extensive restructure, resulting in the closure of a string of outposts in nine countries, including Australia. That was part of a wider global cost-cutting drive, which will see the loss of at least 230 jobs throughout the Asia-Pacific region and as many as 1200 worldwide.

Barclays' rapid exit from Australia has wider implications for the local market and is part of a global restructure.
Barclays' rapid exit from Australia has wider implications for the local market and is part of a global restructure. Photo: Bloomberg

The announcement confirmed news revealed by Street Talk on Wednesday that Barclays was moving to withdraw from Australia. About 80 local jobs were axed as part of the global downsizing.

"With these actions, we are accelerating the investment bank strategy outlined in 2014, focusing on its core strengths and running the business for returns. We continue to build on the business's dual home markets in the UK and US," Mr Staley said in a statement. "In Asia, we will continue to provide expertise and resources to clients who have crossborder requirements from offices in China, Hong Kong SAR, Singapore, Japan and India."

Australia has long copped criticism for being an over-serviced investment banking market, but in the past decade has also been seen as an important gateway to Asia. In the past three years, however, several firms have retreated or cut jobs in Australia.

Canada's GMP said this month it would exit the local market, and in December Commonwealth Bank of Australia said it would shut its institutional equities and capital markets businesses. Malaysia's CIMB left Australia last year and Nomura dismantled its local institutional equities franchise.

Others expected to wind back

Barclays' rival Royal Bank of Scotland has also wound down its Australian business.

Citigroup is expected to embark on global headcount cut this month including in Australia, while Deutsche Bank is also axing positions across markets.

"My guess is that others will wind back," a senior banker said on the basis of anonymity. He based his view on the fact that several firms appeared to have "very little revenue" against large overheads.

A different banker, who also declined to be named, said: "the withdrawal of Barclays, so soon after CIMB, is tough for the bankers involved, but demonstrates the importance of business models being full service and global, or being truly focused and independent.

"Being caught in the middle truly is no man's land."

Speculation has also centred on Tokyo-based Nomura's commitment to Australia.The bank will not have any permanent staff based in Melbourne this year, despite re-committing to leasing an office there. Insiders have reiterated Nomura's commitment to Australia.

In contrast to the departures, in the past 18 months, some independent firms and boutiques have opened up in Australia or expanded. CLSA established a local advisory business, Houlihan Lokey entered Australia and former Greenhill Caliburn stalwarts started Luminis Partners.

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