Barclays makes cuts in Europe ABS team: source

By Anna Brunetti

LONDON, July 29 (IFR) - Barclays (LSE: BARC.L - news) has made significant cuts to its European ABS team due to disappointing activity in that market, a source familiar with the matter told IFR on Wednesday.

The move concerns at least four members of the ABS trading team and other members of the research and sales team, and comes as the bank said it would speed up cost-cutting plans.

Some of those affected will be moved to other fixed-income credit teams, while others have been placed at risk and will most likely leave the bank, the source said.

"The move has been under consideration for the past year and reflects the lack of issuance and trading activity in the ABS market, and therefore the lack of business opportunities," the source said.

"Unlike the US, the European market never really recovered post-crisis, and despite everyone expecting it to be revitalised, it's undergoing structural changes that the group doesn't see as immediately positive."

The action comes at a time when European regulators and central bankers are doubling their efforts to revive the ABS sector.

Around 80bn of ABS bonds was placed last year, according to IFR data. Some analysts had expected 100bn or more of issuance in 2015, but at the current run rate it will likely fall short of that.

At its peak, the ABS market saw volumes of US$1.2trn in 2008, according to research group Bruegel.

Barclays will now focus its efforts on the booming US securitisation business, the source said.

Barclays currently ranks fourth in the Thomson Reuters US ABS league tables with a 9.1% market share for this year. (Reporting by Anna Brunetti; Editing by Natalie Harrison and Marc Carnegie)