Barclays Signals It’s Not Worried by Goldman’s Marcus—So Far

(Bloomberg) -- Barclays Plc signaled it’s not yet worried about Goldman Sachs Group Inc.’s incursion onto its home turf.

Marcus, the Wall Street firm’s two-year-old digital banking service, launched in the U.K. in September, aiming to lure customers by paying better interest on deposits than its established rivals. On a conference call Wednesday to discuss Barclays’ third-quarter results, executives were asked by Credit Suisse Group AG analyst Claire Kane to discuss the evolution of lending margins in the bank’s home market.

“What we are starting to see a little bit more of is some competition on the liability side,” Tushar Morzaria, Barclays’ finance director, said on a conference call, without mentioning Goldman or Marcus by name. “You’ve seen one of our U.S. competitors enter the market in the U.K., and that’s got a lot of attention.”

“That, in and of itself, is not so much of a big deal,” Morzaria said. However, “you’re seeing some of the larger lenders pricing-up liabilities. Our loan-to-deposit ratio is below 100 percent, so we’re probably less geared to having to lock up that funding in the way that other competitors may be, but we’ll see how that plays out.”

Read more: Barclays Shines, Deutsche Bank Falls - EU Financials Wrap

Chief Executive Officer Jes Staley chimed in with an explanation for how Barclays’ loan book has stayed smaller than its deposit base, saying the bank is being “prudent around credit in the U.K.,” and has been since the Brexit vote.

However, it’s different for Barclays in the U.S., where the British bank is preparing to unveil its own digital offering to American consumers. For all the attention Staley has showered on fighting Goldman in investment banking, the race for consumer deposits is heating up, too.

Despite Marcus’s rapid expansion, the platform remains relatively small, even in the U.S., and lends more than $4 billion. In fact, Goldman is looking to rein in the unit’s growth as the bank grows more cautious about the consumer debt market, people with knowledge of the matter have said.

To contact the reporters on this story: Edward Robinson in London at edrobinson@bloomberg.net;Stefania Spezzati in London at sspezzati@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Keith Campbell, Paul Armstrong

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