Barclays beefing up wealth management unit

Barclays Wealth, the wealth management arm of Barclays Group PLC, plans to become a top-three competitor in the next four to five years, Barclays executives said while presenting quarterly earnings today.
The firm plans to spend about $535 million (£350 million) over the next three years to develop its wealth management products and recruit advisers, mostly in the U.S. and in Asia. The firm will shell out about $153 million on that effort this year alone, Chris Lucas, group finance director, said on an earnings call.
The wealth management unit reported $68 million in profit before tax in the first quarter, a 50% increase over the same period a year ago. Client assets climbed 3% to $237 billion.
The wealth management unit is now part of the corporate and investment banking division, where profits rose 47%, to $2.3 billion. Barclays Capital, which comprises the firm’s 2008 acquisition of Lehman Brothers Holding Inc.’s North American operations and includes a 19.9% stake in BlackRock Inc., accounted for 62% of the firm’s profits.
“The BlackRock transaction put us in exactly the position we want to be in from a regulatory point of view in the asset management space,” said Robert Diamond Jr., group president for the division. “We’ve known for a while that having our wealth management business alongside our investment bank and Barclays Capital made a lot of sense.
“Our wealth business is now poised … to emerge as a top three player over the next four to five years.”
Barclays, which already has more customers, employees, and branches outside the United Kingdom than inside it, has said that it plans to hire aggressively for the wealth management business, adding about 100 advisers this year. In February, the firm expanded its force in the United States, hiring three advisers for its Washington and Philadelphia offices. More recently, it has made several appointments in South Asia.