BANZAI7 NEWS--In the bank's first report on the European banking sector under the Barclays Capital brand, its analysts took a negative views on the investment banking industry.
This comes after a 15-month period in which the U.K. bank has made a big push of its own in the sector since buying Lehman Brothers' North American operations in 2008.
Barclays' analysts said the corporate and investment banking industry in Europe will be 20% less profitable by the end of 2010 and is likely to a record a further 4% decline in profits in 2011, as fixed-income revenues fall on the back of tighter spreads and lower volumes.
Corporate and investment banking divisions were among the largest beneficiaries of the market recovery last year, however Barclays' analysts said that if the economic recovery persists "the baton" will pass to retail and commercial banking, which will do better in a higher interest rate environment.
WB7: Perhaps they would be more profitable if they scaled back their pay.
WB7: Perhaps they would be more profitable if they scaled back their pay.
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