Barclays Capital aims to double Asia revenue

Barclays Capital, the investment arm of Britain's third-biggest bank, plans to double revenue and staff in Asia by 2013, putting its faith into growing Asian markets despite recent credit turmoil.
Ivan Ritossa, global head of foreign exchange and Asia rates, told Reuters on November 28 that dislocation in credit markets was not expected to derail growth in financial markets in Asia and the rest of the world.
"There has been a lot of gloom and doom around the credit markets, but if you look at the other markets they are functioning quite well," Ritossa said in an interview. "They are less volatile than they were in 2002 or in 1998 and 1997."
The Asian financial crisis battered Asian markets in 1997 and 1998. The technology bubble then burst in 2000, followed by three years of falling stock markets in Asia before a recovery in 2003. Ritossa said that the yen-dollar exchange rate looked fair after the greenback's decline against major currencies. "On many measures the US dollar is cheap. Against the yen it's probably fair value but it looks cheap against the euro and the pound."
The yen has risen 9 percent versus the dollar this year while the euro has risen about 13 percent against the dollar since the start of the year and hit a record high of $1.4966 on November 30.
Ritossa said that Barclays is banking on Asia's economic prospects and its domestic savings rate of 33 percent - which is 50 percent higher than Europe and triple that of the United States. This has been driving demand for financial products.
"Barclays Capital's business in Asia Pacific has been growing by around 25 percent a year in revenue terms for the past three years, and we expect this trend to continue over the next few of years," he said, adding that Asia revenues Asia could double by 2013. He said staff in Asia could also double from 3,500 now, a fifth of Barclays Capital's total staff.
"In five years I'd say at least 20 to 25 percent of Barclays Capital's profits could well come from Asia." Barclays Capital has been the bulwark for the group's earnings this year, accounting for about 40 percent of Barclays' pretax profit in the first half of the year.
Barclays said this month it took a 1.3 billion pound ($2.69 billion) writedown for losses on securities linked to the US subprime housing crisis, less than was feared.