Barclays to infuse over Rs 3,000 crore capital in India operations

By: |
August 26, 2021 3:50 PM

Barclays said on Thursday the investment would help grow its corporate and debt investment banking, as well as private clients businesses.

barclays indiaThis is Barclays' single largest capital infusion in its Indian business in the last three decades. (File)

Barclays announced it is pumping in more than $400 million 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 on Thursday 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 USD bond volume, with a year-to-date share of 14%, according to Dealogic. Rivals such as JPMorgan and Standard Chartered Bank have a share of 13% each, while HSBC has 12%.

“As economic activity gathers momentum, there is increased demand for capital from clients,” said Jaideep Khanna, Barclays country CEO for India.

“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 has increased by 55%.

“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,” according to a source familiar with the matter, who did not wish to be identified as he was not authorised to speak to the media.

Barclays, which has been in India since 1990, is now present in six locations, with 600 employees across its corporate banking business in the country.

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