Barclays' Middle East Leadership Reboot: A Play for Capital Market Dominance in a Rising Region

Barclays has placed a bold bet on the Middle East's surging financial influence by appointing Khaled El Dabag and Walid Mezher as Co-CEOs for its regional operations. This dual leadership structure, effective July 2025, aims to capitalize on the region's growing role in global capital markets while aligning with the bank's broader three-year strategy to streamline operations and boost returns. The move underscores Barclays' ambition to turn the Middle East into a profit engine, blending the complementary expertise of two veterans whose careers have been defined by shaping the region's financial landscape.

The Co-CEO Play: Why El Dabag and Mezher?

El Dabag, with 25 years of investment banking experience in Dubai and New York, brings deep expertise in structuring deals for corporate clients, particularly in energy and infrastructure. As former head of MENA Investment Banking, he has steered Barclays' advisory role in landmark transactions, such as the privatization of Saudi Aramco's downstream assets. Mezher, meanwhile, has spent 19 years at Barclays, most recently leading Markets activities across the Middle East and Africa. His focus on sales, origination, and debt capital markets positions him to drive growth in trading and client execution—a critical edge as regional wealth surges.

Their partnership is designed to eliminate silos between Barclays' Investment Banking and Markets divisions, enabling faster decision-making and cross-selling opportunities. Stephen Dainton, BBPLC President, emphasized the strategic imperative: “The Middle East is no longer a side note—it's a linchpin of global finance. This structure ensures Barclays can act as a unified partner to clients in a region where capital flows are accelerating.”

Strategic Alignment: Efficiency Meets Ambition

The co-CEO model directly supports Barclays' three-year plan to become “Simpler, Better, and More Balanced” by 2026. Key targets include:- £500 million in cost savings by 2025 (already £150M achieved in Q1 2024), driven by operational streamlining.- Reducing the Investment Bank's share of Group RWA to 50% by 2026, freeing capital for higher-return divisions like UK retail banking.- 11% ROTE by 2025, rising to over 12% by 2026—targets already exceeded by the Investment Bank, which delivered 16.2% ROTE in Q1 2024.

The Middle East fits seamlessly into this framework. By unifying Investment Banking and Markets under one leadership team, Barclays can:1. Leverage client relationships across both divisions, from sovereign wealth funds to family offices.2. Cut costs by eliminating redundant processes, such as overlapping sales teams or technology platforms.3. Accelerate deal flow in sectors like energy transition, real estate, and tech—areas where Middle Eastern capital is flowing aggressively.

The Prize: A Region on Fire

The Middle East's financial ascendancy is undeniable. Sovereign wealth funds now hold over $3.2 trillion in assets, and private wealth is projected to grow at 7% annually through 2030. Barclays is well-positioned to benefit:- Private banking: The appointment of Farzad Billimoria as UAE Private Bank head signals a push to capture high-net-worth clients, particularly in wealth hubs like Dubai and Riyadh.- Debt capital markets: Mezher's expertise in structuring debt deals aligns with demand for infrastructure financing, from UAE's Expo City to Qatar's World Cup legacy projects.- ESG integration: Barclays' focus on sustainable investing—distinguishing between ethical, responsible, and impact investing—can attract ESG-focused capital, a priority for younger Middle Eastern investors.

Investment Implications: Risk and Reward

Barclays' Middle East pivot offers two clear catalysts for investors:1. Cost discipline: The £500M savings target, if met, could structurally improve margins. A cost-to-income ratio of 61% by 2025 would put Barclays on par with peers like HSBC.2. Regional growth: A 12% ROTE target by 2026, achievable if Middle East revenue outperforms, could lift shares. The bank's Q1 2024 results—net profit up 20% to £1.86B—hint at progress.

Risks remain, however. Geopolitical tensions, such as Iran's nuclear talks or Gulf rivalries, could disrupt markets. Additionally, Barclays' US Consumer Bank, which dragged ROTE to 4.5% in Q1 2024, demands close scrutiny. Yet the Middle East's momentum suggests Barclays is placing its best foot forward in the right market.

Verdict: A Worthwhile Bet on Regional Power

Barclays' Middle East leadership shift is more than a managerial tweak—it's a strategic masterstroke to tap into a region where capital is abundant and demand is soaring. For investors, this aligns with the bank's broader efficiency push, which could deliver double-digit ROTE by 2026. While risks persist, Barclays' early wins in cost savings and deal flow suggest it's primed to outperform in a high-growth arena. Consider this a long-term play for those betting on the Middle East's rise—and Barclays' role in it.