Morning Coffee: Barclays’ peculiar promotion ahead of strategy update. French bank confesses it lost its soul for 5 years

efinancialcareers.com:

“Personnel is policy”, as the saying goes – if you want to know what an organisation is planning, look at who is being promoted and why.  But it doesn’t always work that way.  Sometimes, other factors intervene and personnel moves can be a downright misleading guide to strategy.  It seems that Barclays' leveraged finance business, where Na Wei has just been promoted to sole head , might be one of these unusual cases.

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The leadership of this business unit has been a bit of a saga over the last twelve months – in April last year, Wei was made global co-head alongside Tom Blouin, at a moment when “hung” leveraged transactions were causing a certain amount of trouble for the bank’s capital measures.  It was noticed in November that Barclays seemed to be talking about reducing its risk appetite and “managing exposures down”.

If it wasn’t for one thing, this would be a very explainable personnel move.  Na Wei is based in London and led the EMEA side of Barclays’ leveraged finance.  She made her reputation by building a relationship with Mossin and Zuber Issa of EG Group over the years.  She’s been involved in every one of the $10bn of deals they have done since 2017.  This business is likely to be considerable more sticky and higher-margin than the kind of private equity fund-driven transactions that have characterized the US market, which was Tom Blouin’s franchise.

So this promotion would have made sense as part of a smaller-but-better strategy, reducing the overall size and capital demand while improving the return on capital. You could sort of call it “Blackburn, not Blackstone”. (The Issa brothers are based in the Lancashire town).

Except, that’s not what’s going to