There are the odd scandals and unresolved issues knocking about, such as the deal with Qatar that kept the bank afloat in the darkest hours of the financial crash. Barclays remains under investigation by the Serious Fraud Office (SFO) over that arrangement and six of its former employees have been charged in connection with the SFO’s investigation into the manipulation of US Dollar Libor. Their trial is scheduled for early next month at Southwark Crown Court. Then there are the PPI (payment protection insurance) claims, of course, but nothing is out of the ordinary for your typical international bank these days.
However, eyebrows were raised when Barclays decided to pull out of Africa and various other emerging markets – begging the question – “What is the true state of its balance sheet?”
On the positive side, new chief executive, Jes Staley, has appointed CS Venkatakrishnan as chief risk officer. He will be joining in May when Paul Compton also comes on board as group chief operating officer in a “newly configured” role that doesn’t sound as if he will be getting much sleep. Mr Compton will be responsible for “operations and technology, structural reform, cost transformation, major project delivery, administration, corporate real estate services, and sourcing”!
Both are arriving from JP Morgan Chase, so that should sort things out. Fitch Ratings, however, is not so sure, remarking that Barclays’ “planned business disposals, most notably the intention to sell its African and some investment banking, wealth and credit card businesses, highlight the bank's struggle to achieve sustainable profits”. Shareholders have already openly demonstrated their feelings as witnesses when the bank’s share price dropped dramatically earlier this month.
Given the turnover of chief executives in the last few years, shareholders must be asking, “Who exactly is in control of Barclays?” Is it rudderless and has its senior management been tinkering round the edges rather than solving its core problems?
Abandoning growth prospects in Africa, where it has been increasing its presence since the 1920s, can hardly be described as tinkering, so I am hopeful that with Jes Staley at the helm Barclays will finally preen its feathers and get back on its perch. As one of the least tarnished UK headquartered international banks post the financial crisis, that’s what should be happening.
But if the new board doesn’t work out, it could be in danger of going into a tailspin that will engulf Captain Beaky and his new band. In case you have forgotten or were born after 1975, Beaky’s band comprised of Timid Toad, Reckless Rat, Artful Owl and Batty Bat, none of whom are currently executive directors at Barclays (we hope), but you may have your own opinion about this!
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