The current woes of German based Deutsche Bank are proving to be a big advantage for UK based Barclays bank which is attracting more clients towards itself. Barclays is managed by Jes Staley who has recently managed to convince several large hedge funds with balances worth $20 billion to shift their funds to Barclays. According to sources around half of that amount belongs to a single client. This is the largest transfer of such scale to occur after the announcement by Deutsche Bank that it is withdrawing itself from equities business which sent shock waves into share markets across the world.
It started frenzy in the highly competitive equity industry as other banks tried to attract its hedge fund clients towards themselves. Usually prime brokerage firms are loyal to their banks as they depend on them to execute their trades, provide wager leverages and also act as custodian for financial assets. The trading activities of hedge funds are deeply connected with their financial brokers and switching service providers is an onerous process. Since Deutsche announced on 7th June that it is shifting all its prime brokerage business to BNB Paribas market rivals have been targeting its clients for business.
Apparently Staley told his staff that Barclays will take advantage of this situation to improve its client base as not every client of Deutsche would be happy to shift its business to BNB Paribas. Deutsche bank spokesperson stated that it is natural for some clients to move balances during the transition process but after the deal is completed their balances will move back. Reuters stated that Barclays has been trying hard to attract the prime brokerage clients of Deutsche Bank along with other biggies like Goldman Sachs and JP Morgan Chase. Their argument is that since hedge funds have to shift balances to BNB Paribas they might as well consider other options in the market.
Edward Ordway, with a BSc (Hons) Business & Management degree, is been working as a Senior Content Writer for 3 years in our organization. He is given the accountability to write articles and blogs associated with the world of Business, comprising deals & agreements, mergers & acquisitions, cryptocurrency, stock market, and other trending topics. Edward, in free time, travel around to new places and share the experiences through his personal blog.