(Bloomberg) -- Barclays Plc is considering re-entering Saudi Arabia as it looks to capitalize on the kingdom’s growing need to access capital markets around the world.
The lender plans to grow its team across the Middle East region, including in Dubai and Abu Dhabi in addition to Riyadh, Chief Executive Officer C.S. Venkatakrishnan said in an interview on the sidelines of the kingdom’s Future Investment Initiative.
The bank was already among lenders that helped Saudi Arabia’s sovereign wealth fund sell a two-tranche sterling-denominated bond to diversify its investor base earlier this year. The Public Investment Fund ultimately raised about £650 million ($844 million) with the bonds.
“We’re looking at how best to re-enter the country,” Venkatakrishnan said. “We will consider corporate banking work, but investment banking and trading will be the focus.”
The move to re-enter Saudi Arabia would come a decade after Barclays pulled out of the country under then CEO Antony Jenkins. Venkatakrishnan’s comments come as banks around the world beef up their operations in the oil-rich kingdom, which is in the midst of a trillion-dollar economic transformation plan.
Earlier this year, Barclays kicked off a three-year plan to improve the profitability of its investment bank, a unit that includes trading, advisory and capital markets origination. The bank has been doing so by focusing on those clients that bring more of their business to the bank.
“We’re three quarters into a twelve quarter plan, so there’s a way to go but so far I’m encouraged by the progress,” Venkatakrishnan said. “So far so good. Investment bank division has had good results year-over-year, held it’s own.”
Venkatakrishnan is among banking executives advising the UK’s new Labour government as it looks to make economic growth its central mission through a series of sweeping reforms to planning regulation and renewable-energy infrastructure. The Treasury is also reviewing how it can unlock billions of pounds of investment from pension funds in order to revive the UK’s moribund stock market.
Venkatakrishnan said it would help if the government and regulators would relax the UK’s stamp duty on share purchases. He also hopes to see further education of younger consumers to help them understand the importance of equity investing.
“We really want there to be good IPOs in the UK, but it’s going to be a while — equity risk culture in the UK needs reviving,” Venkatakrishnan said. “Would love to see some of the young UK companies we work with hit the UK markets, but in the end if they see the demand is in the US and want to list on Nasdaq or NYSE, we understand why.”
US Elections
In the wide-ranging interview, Venkatakrishnan said one of the key areas investors are watching for in the outcome of the US election is the stance that the winning candidate will take toward M&A activity and placing tariffs on global trade.
He noted that Spirit Airlines Inc.’s attempt to merge with JetBlue Airways Corp. was blocked on antitrust grounds. A recent court order also froze Tapestry Inc.’s $8.5 billion acquisition of Capri Holdings Ltd.
“Investors have 2 big concerns: antitrust policy and what will happen with tariffs and the impact that will have on the economy,” Venkatakrishnan said. “That’s the important thing and that we will have to wait and see.”
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