Barclays said on Thursday it is pumping in more than $400 million (Rs 3,000 crore) into its India arm to tap rising corporate and investment banking activity in the country that is now recovering from the pandemic.
This is Barclays’ single largest capital infusion in its Indian business in the last three decades. It comes after the British lender pulled out of the retail business in Asia’s third-largest economy in 2011 and exited its equity investment business in 2016.
Barclays said the investment would help grow its corporate and debt investment banking as well as private clients businesses.
Revenue from investment banking in India so far this year was $498 million, versus $339 million in the same period last year and $538 million in 2020, according to Dealogic.
Barclays leads India’s debt capital market by dollar bond volume, with a year-to-date share of 14 per cent, according to Dealogic. Rivals such as JP Morgan and StanChart have a share of 13 per cent each, while HSBC has 12 per cent.
“As economic activity gathers momentum, there is increased demand for capital from clients,” said Jaideep Khanna, Barclays country CEO for India.
Barclays India mainly lends to corporate houses with exposures largely to highly rated clients and subsidiaries of multi-national companies, according to Fitch unit India Ratings & Research.
“Last year was a very good year for debt capital market in India, particularly as domestic bank credit didn’t take off much. There was a lot of interest in global credit and the overall market has been robust,” said Ananth Narayan, associate professor of finance at S.P. Jain Institute of Management and Research.
With the fresh capital infusion, Barclays India’s Tier-1 capital is up 55 per cent.
“According to central bank norms, there are limits placed on what a lender can do with respect to their balance sheet, but now that the bank’s overall capital base has expanded, its ability to lend more has increased,” said a source familiar with the matter.
Barclays inaugurated its international banking unit branch at GIFT City in Gujarat in February, as part of its expansion plans.
