Barclays hired some new securitization professionals, now it's having second thoughts (again)
Barclays' asset backed securitization (ABS) aspirations have a complicated history. In 2015, the British bank scaled back its ABS business in Europe and cut the team heads. Since then, it's been building things back up. Now it's getting cold feet again.
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Bloomberg reported today that Barclays is pulling back on asset backed loans after losing up to £500m on loans to UK mortgage provider Market Financial Solutions and £110m+ on loans to US subprime auto parts provider Tricolor. Both loans were underwritten by collateral, but in both cases there are suggestions that this collateral may have been double pledged.
Barclays declined to comment for this article. Bloomberg said today that the bank is scaling back loans to small corporates and focusing on loans and securitizations for larger corporates instead. The bank may reportedly change tack (again) if its risk profile changes.
Barclays' current cold feet come after the bank said it was interested in growing its securitization business when it unveiled a new strategy back in February 2024. At the time, Barclays said it hoped to earn an additional £500m annually from a combination of additional revenues from securitization, European rates trading and equity derivatives. It was not intending to lose money instead.
Barclays has since made some big hires in the securitization space. In February 2026, it appointed Chetan Vohra from Cerberus Capital Management as global head of securitized products. Vohra replaced veteran securitization banker Scott Eichel, who joined in 2018 after a career at RBS and who was also supposed to grow the business. Eichel hired people like David Garner, Barclays' global head of securitized products bond trading, who joined in 2024. Last October, Barclays appointed existing bankers Benjamin Fernandez and Jonathan Wu as co-heads of ABS and residential mortgage backed securitization globally, based in New York.
As Barclays withdraws from securitized lending to small corporates, it's not clear whether its people involved in this occupation will remain occupied. It's not entirely surprising that the bank is having second thoughts, though. £610m ($815m) of potential losses are not negligible and the bank is keen to increase returns in the investment bank while cutting costs and minimizing risk weight assets allocated to the business.
Speaking in February, Barclays' CFO Anna Cross said revenues in the investment bank were already expected to grow more slowly this year, as both the rates "tailwind" dissipates and market share growth in investment banking increases more slowly. The bank can't afford more big losses in ABS. Earlier this month, Barclays' CEO CS Venkatakrishnan said he was sorry that the existing losses occurred. This was probably a sign that a cold wind was coming.
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