Barclays Continues to Grow its Money Management Business
Barclays (NYSE:BCS) has been very particular about which of its businesses it wants to continue to invest in since the economic downturn. And its recent actions clearly highlight its focus on core retail and commercial banking operations as well as its credit card business – both of which have been intensified in emerging economies like India, China and the Middle East. Another business in which Barclays has been seriously investing is its wealth management arm, Barclays Wealth. The company recently added 5 more advisors among its ranks, bringing the division’s strength to more than 250 in the U.S. and Argentina. [1] The London-based global bank competes with other worldwide banking institutions and financial services groups like Citigroup (NYSE:C), The Royal Bank of Scotland Group (NYSE:RBS), Bank of America (NYSE:BAC), UBS (NYSE:UBS) and JPMorgan Chase (NYSE:JPM).
Barclays Wealth at a Glance
Barclays Wealth focuses on private and intermediary clients worldwide, providing international and private banking, fiduciary services, investment management, and brokerage. The division works closely with all other parts of the Barclays group to leverage synergies from client relationships and product capabilities. [2]
In return for its world-class investment solution offerings with institutional quality products and services from Barclays Capital and Barclays Commercial Bank, Barclays charges its customers a portfolio management fee. The division also draws additional income by investment and trading activities.
Our analysis reveals that the division contributes to a little over 2% of the company’s total value.
But this Division’s Contribution Could Increase Going Forward
The total client assets, comprising customer accounts and client investments under the Barclays Wealth division, are represented by us as Portfolio under management in our analysis.
We currently forecast a 4% growth in the value of assets managed. But this number could increase given the added focus on this business.
There is, hence, quite a bit of value that can be drawn from the wealth management business, suggesting upside to our $18.30 price estimate for Barclays.
Our $18.30 price estimate for Barclays stock is roughly in line with market price.
See our full analysis for Barclays stock
Notes:- Barclays adds 5 advisers with $18 bln client assets, Reuters, May 18 2011 [↩]
- Barclays Annual Report [↩]