LONDON (Reuters) - Barclays is looking to take on a $20 billion portion of Deutsche Bank’s prime brokerage business, sources told Reuters, under plans to become Europe’s premier investment bank and compete more strongly with U.S. rivals.
After its victory over activist shareholder Edward Bramson who failed in his bid to dismantle the British lender’s trading operations, Barclays is trying to build up its business serving hedge funds.
Barclays declined to comment.
Germany’s flagship lender said on July 7 that it will axe its equities trading business as part of a major restructuring, and that BNP Paribas had signed a preliminary deal to serve prime finance and electronic equities clients impacted by the plan.
However, some of Deutsche Bank’s clients are weighing alternatives to shifting their business over to the French bank, the sources familiar with the matter said.
“It is not unexpected and perfectly natural that some clients may wish to move balances to other providers as a temporary measure while our discussions with BNP Paribas are ongoing,” a spokesman for Deutsche Bank told Reuters.
“Our discussions with BNP Paribas are progressing well and we are confident that balances will move back once the deal has been completed.”
The $20 billion worth of client business in Barclays’ sights includes around $10 billion with one client with whom it already has a relationship, and who has decided to shift its activities to the British bank following news of Deutsche Bank’s planned exit from equities trading, one of the sources said.
BNP Paribas declined to comment.
Reporting By Sinead Cruise and Josephine Mason, editing by Rachel Armstrong and Emelia Sithole-Matarise