Barclays Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Barclays Bank was founded in 1896, but its precursors date back as far as 1690. The Barclay name became connected to the business when the bankers John Freame and Thomas Gould joined forces with Freame’s son-in-law John Barclay in 1736. At the start of the 21st century Barclays, along with Lloyds, is one of the remaining Big Five English banks that previously dominated the City. During the 1980s and 1990s the other three original banks were absorbed by competitors and the merchant banks joined foreign banks. The history of Barclays provides an important case study for business strategies.

Barclays has long had a strong presence in Britain because of its early development as a large retail bank with outlets all over the country. Stiff competition from joint-stock banks equipped with capital and a network of branches drove what was once a small local bank on Lombard Street to merge with 19 other banks (including Bevan, Gurney, Goslings, and Backhouse) to set up a modern joint-stock bank in 1896. Barclay & Co. Limited then had 182 branches. The families who united forces conceived a durable strategy of organic and external growth along rules of steady entrepreneurship, and kept nonexecutive representatives on the board.

Barclays became one of the Big Five joint-stock banks of the City after it merged with several banks (Bolithos in 1905; United Countries Bank in the Midlands in 1916; London, Provincial & South Western Bank in 1918; Union Bank of Manchester in 1919; and, much later, Martins Bank in 1969). Among British banks in 1932 it was first in number of outlets (2,175) and, with Lloyds, second in deposits (£382 million) behind Midland. Its widespread middle-class customer base contributed to a continuous transformation into retail banking, which allowed Barclays to join the rally for mass banking beginning in the 1960s. Such growth fuelled its early innovations: the first British credit card in 1966, the Barclaycard, and then the first world cash machine or automatic teller machine, Barclaycash.

Barclays had taken over three institutions active overseas (Colonial Bank, Anglo-Egyptian Bank, National Bank of South Africa) to form Barclays Dominion, Colonial & Overseas, or Barclays DCO, in 1925. But this move was halted by the decolonization trend, and the bank had to rethink its international strategy. Barclays then expanded through commercial banking operations in continental Europe and the United States. The City had also regained its status in the worldwide banking market thanks to the Euromarket in the 1960s.

In 1976 Barclays tried to build a large investment bank to take profit from the demise of merchant banks. In 1983 it purchased several brokerage houses (De Zoete & Revan, Wedd Durlacher, and Mordaunt) to forge Barclays De Zoete Wedd in 1986; but like its competitors it had difficulty creating a new corporate culture linking commercial banking and investment banking. This led to the amalgamation of the mother and the daughter banks into a new organization where risks were more controlled.

From the 1990s, Barclays designed a diversified strategy. Retail banking was reinforced in the United Kingdom with, for example, the purchase of Woolwich in 2000. Barclays extended to other countries with both success (ABSA, the South African leader, in 2005; Banco Zaragozano in Spain in 2003) and failure (the merger with Dutch leader ABN-AMRO was foiled by rivals). It also asserted itself as a key player in credit cards (Barclaycard and business cards).

Solid investment banking and market banking activities (within Barclays Capital) gathered momentum in wholesale corporate banking and project financing. Barclays moved to compete with a few other European and worldwide banks in asset management (Barclays Global Investors, managing more than $2 trillion) and private banking (Barclays Wealth). While it lacks the financial might of London rival HSBC, Barclays, with 134,000 employees in 2007, still ranks with Halifax-Bank of Scotland, Royal Bank of Scotland, Lloyds, and HSBC, in the top British big banks.

In the future, Barclays will have to ponder its strategy within the new frame of globalization, for example in central European or Asian emerging countries.

Bibliography:

Cassis, La City de Londres, 1870–1914 (Belin, 1987);
Cassis and £. Bossièrе, eds., London and Paris as International Financial Centres in the Twentieth Century (Oxford University Press, 2005);
Ferguson, M. Ackrill, and L. Hannah, Barclays: The Business of Banking, 1690–1996 (Cambridge University Press, 2001);
Kynaston, City of London: A Club No More, 1945–2000 (Chatto & Windus, 2001);
Kynaston, City of London: Illusions of Gold, 1914–1945 (Chatto & Windus, 1999);
Vander, Falling Eagle: The Decline of Barclays Bank (Weidenfeld & Nicolson, 2000).

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