Barclays has the fastest growing stock trading team around — and it’s posing a threat to some of the biggest players

  • Barclays stock-trading team is the fastest growing on the planet so far in 2018.
  • The bank reported second quarter results Thursday, growing its equities business 37% to $US807 million.
  • No other major bank’s stock-trading unit grew faster in the second quarter.
  • It’s the second straight quarter of rapid growth for Barclays’ stock-trading team, which the bank has been investing in heavily under CEO Jes Staley with 35 new outside hires so far this year.

The hottest stock-trading team on the planet in 2018 isn’t one of Wall Street’s giants from the United States.

Morgan Stanley, JPMorgan Chase, and Goldman Sachs may dominate the equities industry in terms of raw market share, but British lender Barclays has the fastest-growing operation in the business so far this year.

The bank reported stellar second quarter earnings results Thursday, and its equities business was a key reason why, growing to $US807 million from $US588 million in 2017 – a 37% increase.

No other major bank’s stock-trading team grew faster in the second quarter.

Barclays’ gains easily outpaced those of European competitors Credit Suisse, Deutsche Bank, and UBS. And while its equities business is still much smaller than those of its US peers in terms of revenue, it grew more than any of them and is within shouting distance of Citigroup, which posted $US864 million in second quarter revenues.

Barclays stock trading team versus us competitorsSamantha Lee/Business Insider

“We obviously feel actually very good about our markets business. I think you’ve seen in our relative revenue performance that we believe we’ve taken a bit of market share again in the second quarter after taking some market share in the first quarter and in the fourth quarter,” CFO Tushar Morzaria said during a call with analysts Thursday. “I’m really pleased with our performance in equities.”

Barclays attributed the success primarily to strong performance in financing and equity derivatives, a product line that thrives on volatility, which has roared back in 2018.

The return of market volatility – which was absent much of 2016 and almost all of 2017 – has revived banks’ stock-trading businesses across Wall Street, though none have benefited as much as Barclays.

It’s the second straight quarter of rapid growth for the bank’s stock-trading team, which grew 43% to $US827 million in the first quarter – the most of any bank during that period as well.

The division has struggled in recent years and in 2016 said it would exit its Asian cash equities business. But lately under CEO Jes Staley it has focused on bringing on new talent and investing in technology, which has helped boost its electronic trading volumes. In September 2017,Barclays brought in Stephen Dainton, formerly of Credit Suisse, as global equities chief, and Dainton has been on a hiring spree since.

In 2018 he’s bolstered his equities roster with 35 new outside hires, according to the bank, including Nas Al-Khudairi, formerly of Credit Suisse, as global head of electronic equities and head of cash equities in Europe; Todd Sandoz, formerly of Nomura, as head of equities in the Americas; and Neil Staff, formerly of Credit Suisse, as global head of exotics trading and head of derivatives trading in Europe.

So far, the investments appear to paying off, though it remains to be seen whether the gains will continue through the second half of the year.

The bank cautioned that July was a subdued month for volatility, a trend that would put a damper on Wall Street’s stock-trading comeback if it continues.

But for now, Barclays holds claim to the fastest-growing equities business in the world.

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