Barclays Capital to Hire as Many as 1,000 Workers, Diamond Says

Barclays Plc, the U.K.’s second- biggest lender, plans to hire as many as 1,000 people, including investment bankers at its Barclays Capital unit, by the end of the year to compete in mergers advice and share sales.

“It would be tilted towards Asia. We need another six to twelve months to complete the build-out,” Barclays President Bob Diamond, 58, said today in an interview. “Equities, advisory and emerging markets would be the areas.”

Earnings at Barclays Capital rose to 1.05 billion pounds ($1.76 billion), from 524 million pounds in the first six months of the year, London-based Barclays said today. The securities unit was helped by thawing credit markets after the company’s September purchase of Lehman Brothers Holdings Inc.’s North American unit, formerly the biggest U.S. bond trader.

“The Lehman acquisition was clearly a strong, strategic move,” Diamond said. “We are getting the benefits already,” he said, adding that it’s unlikely Barclays would expand further into investment banking through acquisitions.

The new hires will leave Barclays Capital’s headcount about the same as it was at the end of 2008. Barclays Capital hired about 2,000 people in the six months on the year, after trimming numbers by 3,000.

Barclays, founded in 1736 as a goldsmithing and banking company, is returning to a business it abandoned 12 years ago when it sold Barclays de Zoete Wedd’s money-losing European equity and corporate finance unit to Credit Suisse Group in 1997 to focus on bonds and loans. At the time, London-based Barclays said expanding BZW’s mostly U.K.-focused units globally would require more capital than it could justify.

“BZW was a marginally profitable U.K. institution,” Diamond said. “Lehman was a premiere firm in the biggest market -- the U.S.”

Expanding in Europe

Barclays Capital has been hiring M&A bankers from Citigroup Inc. and Morgan Stanley in London to expand its European advisory business. The firm named Morgan Stanley’s Mark Warham and Citigroup’s Matthew Ponsonby co-heads of European M&A in May.

“Barclays has approached the task of building up its investment banking business much more aggressively” than Nomura Holdings Inc., which bought some of Lehman’s assets in Europe, Roy Smith, a finance professor at New York University’s Stern School of Business and a former Goldman Sachs Group Inc. partner, said July 24.

“Diamond is clearly pursuing the capturing of market share from a shaken up industry, and is starting from a substantial position in the global credit markets.”

Barclays Capital is ranked sixth in global takeovers this year, advising on deals valued at about $130.3 billion, according to data compiled by Bloomberg. That includes the firm’s agreement to sell its iShares exchange-traded funds business to CVC Capital Partners Ltd. for $4.37 billion.

The bank also maintained its position as the world’s biggest underwriter of international bond sales, beating New York-based JPMorgan Chase & Co. and HSBC Holdings Plc, Bloomberg data show. link.....