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* Barclays aims to integrate corporate and investment bankin UK
* Broking and corporate relationships to win new mandates
* Sees upside in M&A, ECM in 2017
* Will look to selectively hire in UK team
By Anjuli Davies and Lawrence White
LONDON, Dec 8 (Reuters) - Barclays Plc is taking acontrarian bet that Britain's vote to leave the European Unionwill help it win more investment banking business in its homemarket, despite the sharp slowdown in deal activity since thereferendum.
The British lender has reshuffled some of its top investmentbankers so they can focus on the UK, anticipating that the weakpound and a quiet 2016 will lead to a rise in dealmaking andshare listings next year even as the country faces its biggestpolitical and economic shake-up since the Second World War.
At the heart of the strategy is a plan to win more advisorybusiness from British companies the bank already lends to, withAlisdair Gayne leading the charge as head of UK investmentbanking.
Gayne joined Barclays from Morgan Stanley in 2010, taskedwith building out its corporate broking franchise, a role hewill retain. Largely a UK phenomenon, corporate brokers act asintermediaries between public companies and their institutionalinvestors. They are meant to be a corporation's trusted adviser,built up over years of being its eyes and ears in the market.
Although it's not a particularly lucrative business on itsown, the relationships built in corporate broking can be used toclinch big ticket jobs from the company when they decide to pullthe trigger on equity raisings and dealmaking.
Since joining Barclays, Gayne has been challenging the gripof the top three brokers in the UK -- JPMorgan, Bank of AmericaMerrill Lynch and UBS -- on the largest British companies.Barclays is now ranked number 5.
So far in 2016, the bank has won 8 new corporate brokingmandates, including tobacco maker Imperial brands and chipdesigner ARM, which is being taken over by Japan's SoftBank, adeal the UK bank also won a mandate as adviser on.
Gayne is now being tasked with using corporate bankingrelationships as well as broking relationships to win moreinvestment banking mandates.
BIG OPPORTUNITY
"In the UK we're not taking full advantage of the bigopportunity offered by the strength of our corporate bank," JohnMahon, Barclays head of corporate and investment banking forEurope, Middle East, Africa and Asia, told Reuters last week.
"Those firms ahead of us in UK investment banking aren'tinvolved to the same extent in corporate banking," he said in aninterview. "The coordination between corporate and investmentbanking needs to improve."
Barclays ranks a lowly ninth so far this year in advisoryfor announced UK target takeovers and eighth for equity capitalmarket business, in value terms, trailing heavyweight U.S.investment banks as well as boutique advisory firms.
The new drive is part of the "Transatlantic" strategyannounced by Chief Executive Jes Staley in March to focusBarclays work on Britain and the United States. In the thirdquarter, 54 percent of the bank's overall revenues came from itsUK business and 31 percent from the Americas.
The value of mergers and acquisition deals between UKcompanies has plunged 67 percent to a 30-year low since theBrexit vote in June, according to Thomson Reuters data.
Overall, UK investment banking fees earned in the UK aredown 14 percent so far this year to total $4.1 billion or 5.5percent of global investment banking fees and 22.8 percent ofthe Europe, Middle East and Africa (EMEA) fee pool.
Back in 2000, UK investment banking fees represented 9percent of the global fee pool and 26 percent for EMEA,according to Thomson Reuters data.
Gayne sees that turning around next year.
"There are a lot of situations where we see companiespreparing for next year ... we see significant upside in UK M&Aand equity deals," Gayne told Reuters.
That presented a growth opportunity, Mahon said.
"Against a backdrop of EMEA deal volumes being down thisyear we expect people to withdraw from the market, while we'llexpand and upgrade," said Mahon.
"Maybe the market is quiet for a while, but I kind of likethat ... It means it's not a bad time to invest."
FINDING A NICHE
Barclays ranks number three in Britain in terms ofinvestment banking fees earned year-to-date, netting $230million worth of fees or a 5.59 percent wallet share. This is upfrom a ranking of eight in 2008, the year it bought the LehmanBrothers investment banking franchise.
"Barclays is holding its own in the league tables, notslipping the way Deutsche Bank is in Europe and the U.S.," saidDavid Hendler, independent analyst at New York-based Viola RiskAdvisors.
The plan to squeeze more corporate finance deals fromexisting customers mirrors the successful strategy of U.S.rivals like JPMorgan and Citigroup.
It also reflects a broader trend for investment banks tobecome more specialised, as tougher regulations since the 2008financial crisis make trying to be in every market increasinglydifficult.
Barclays has named former Europe and Asia investment bankingco-heads Sam Dean and Crispin Osborne to the roles of head andchairman of corporate finance for EMEA, respectively.
They said the split takes away broader managerialresponsibilities and narrows their roles, allowing them to focuson key targets and client relationships while Gayne concentrateson the UK market.
"Jes has come in and said 'where's the upside? Where's thefocus?'," Dean told Reuters.
"UK banks will be the most nimble around Brexit...We havesaid when things are clearer we are committed to quickly makingthis work for our clients."
Barclays on Oct. 27 reported a forecast-beating bounce inthird-quarter profits to 1.7 billion pounds, in what Staleyhailed as early vindication of his 'countercyclical' bet.
The bank has been making cuts elsewhere to bolster itsstrategy, selling billions of dollars worth of assets to makesure it only has profitable business lines. (Editing by Sonya Hepinstall)
