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When Bob Diamond, the man who built Barclays’ investment banking arm, becomes chief executive of Barclays group next year, he will look back at a business that now competes head-to-head with Wall Street groups such as Goldman Sachs and Morgan Stanley.

Barclays Capital’s growth over the past 15 years can be partly attributed to its ability to trump competitors in areas such as fixed-income and foreign exchange, but even senior executives admit the firm has dodged a few bullets along the way.

Mr Diamond’s audacious move to acquire the US operations of Lehman Brothers at the height of the financial crisis gave the bank size and scale on both sides of the Atlantic.

But BarCap was also known to be circling a weakened UBS, and narrowly missed what would have been a disastrous tie-up with ABN Amro, the Dutch bank that nearly sank Royal Bank of Scotland.

Barclays may have avoided having to be bailed out by the UK government but it did not sidestep the boom in risky structured products – BarCap has written off billions in toxic subprime assets.

BarCap, which is now headed by two of Mr Diamond’s long-serving lieutenants, Jerry del Missier and Rich Ricci, faces choppier waters than some of its competitors.

A UK government-commissioned panel is examining the future structure of the banking industry, and still could recommend a forced separation of investment banking and retail banking operations.

On the business side, BarCap has invested heavily in building its advisory and equities franchises in Europe and Asia. But its progress continues to be constrained by volatile markets and weak M&A activity.

Moving Mr Diamond, arguably the UK’s most famous banker, into the top job could also further intensify political and public scrutiny of BarCap’s operations, especially if it continues to deliver the lion’s share of the group’s profits.

BANKING AFTER THE CRISIS

CASE STUDIES
GOLDMAN SACHS: confident in ability to adapt
CREDIT SUISSE: aiming for more stable return
JP MORGAN CHASE: focus on international growth
BARCLAYS CAPITAL: facing choppier waters
NOMURA: challenge to win market share
BANK OF AMERICA: steep competition from every bank
UBS: planning to chart aggressive course
MORGAN STANLEY: faces transition period
DEUTSCHE BANK: relying on Preject Integra
CITIGROUP: sticking to game plan
FURTHER READING
Regulation: Reshaping investment banking
Private equity and hedge funds: Looking for new avenus
Exchanges: facing financial reform
Boutique banks: struggling to steal market share
Analysis: Finance: a sparser future
In-depth: Investment banking
Copyright The Financial Times Limited 2017. All rights reserved.
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