In This Article:
* British bank aims to at least double $630 mln revenues
* U.S. to soften rules for market that caused 2008 crisis
* Barclays hiring bankers, traders to pursue U.S. market
By Lawrence White and Sinead Cruise
LONDON, May 28 (Reuters) - Ten years on from the global financial crisis caused by a crash in bonds tied to U.S. home loans, Britain's Barclays is betting a return to that market can bring in bumper revenues to fortify its investment bank.
After the crisis, banks initially shunned the business of selling and trading slices of loans tied to residential property, autos or commercial real estate, as such securitisations were demonised for their role in the crash.
But now Barclays is preparing to make its comeback, having assembled a team of over 140 securitisation bankers and traders with plans to hire more as investors clamour for the higher returns such deals offer compared with traditional stocks and bonds.
Having pared back its securitisation business in recent years amid a wider restructuring, Barclays' head of global markets Stephen Dainton said the time was right for the British bank to re-enter the market in force.
"This was a 500 million pound ($632.80 million) business for Barclays in terms of revenues last year, when global peers are making 1 billion pounds a year, so for us to get to 500 million pounds additional revenue over 3 years or 100-150 million pounds a year should be achievable at measured pace", he said.
The success of that bid would be a huge fillip for Barclays Chief Executive Jes Staley, who is in a race against time to increase investment banking profits and vindicate his faith in a business that an activist investor argues should be cut back.
Barclays' push is led by veteran securitised assets trader Scott Eichel, who had ringside seats to the highs and lows of the mortgage-backed securities market at Bear Stearns in the run-up to the 2008 crash, and Royal Bank of Scotland afterwards.
Now head of securitised products for Barclays, Eichel has assembled a team of 144 bankers and traders who package up and sell everything from commercial and residential home loans to more esoteric assets such as media and sports franchise rights.
"The market has changed both outside and inside banks, both from a regulatory perspective and best practises inside firms," Eichel said.
"When you dissect the revenues, those years around the crisis were very heavily trading based, whereas now you are back to the banking model where about 80 percent of your revenues are coming from financing and origination."
That means banks are primarily making money from the intended purpose of securitisations- providing companies and homeowners improved access to credit by pooling the risk of lending to them- rather than making bets on the market.