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Executive Interview: A Cohesive Approach to Investment and Corporate Banking

An interview with Chris van Niekerk, Managing Director, Multinational Corporates, Barclays Corporate 

Barclays Corporate as a brand was launched earlier this year, the new face to market of a corporate bank that had been realigned internally to bring the operation even closer to the group’s investment bank, Barclays Capital. In this interview, Barclays Corporate’s Chris van Niekerk, Managing Director, Multinational Corporates, discusses how the corporate and investment bank work together to provide a full banking solution for large corporate clients.

To what extent are the client bases of Barclays Corporate and Barclays Capital already aligned?

There is already a substantial overlap between the client bases, as the two businesses have worked together closely for the past 10 years plus as part of a long-term strategy to develop greater synergy and breadth of services for our clients. We now have relationships with a substantial group of global multinationals, underpinned by a commitment of capital. However, although Barclays Corporate and Barclays Capital have many common clients, these relationships need to be managed on a variety of levels. Typically, the parent company is responsible for investment banking activities, so we endeavour to maintain close contact with the CFO, Group Treasurer and, for strategic issues, the CEO. Where Barclays adds incremental value, however, is Barclays Corporate’s ability to provide corporate banking services, not only to a company’s head office but also to manage subsidiary requirements, such as for a UK subsidiary of a US-parented multinational.

Before the crisis, we saw that multinational corporations were seeking a single, global bank partner, but companies are now adopting a different approach. What is your experience of this?

Since the crisis, treasurers’ perception of counterparty risk has changed substantially, and companies recognise that it is not necessarily in their interests to concentrate aspects of their banking services with a single provider. However, this is not the only driver for a treasurer to seek a trusted panel of banks rather than one global bank. First, the ‘integrated’ nature of corporate-to-bank relationships is now widely recognised i.e., if a bank is committing capital, that bank would also aim to expand its business with a client into other, ancillary areas. As companies work with a panel of core banks, they therefore will often seek to assign their cash management, trade business etc. across these banks, where the banks have the relevant competencies. Secondly, every bank is differentiated by its geographic reach and product expertise, so treasurers want to ensure that they are obtaining the best in class services in each region (or product) in which they do business. For example, one reason that companies choose to work with Barclays is our extensive presence in Africa, with a direct presence in 10 countries and a majority holding in ABSA in South Africa - few international banks are able to provide this coverage. While clearly there will be competition between core banks, such as in Western Europe, banks’ services can often be complementary.