|Investors must be forgiven for still asking whether Jenkins is the right man to get his arm around the investment bank and execute a restructuring of a very complex business he had no previous direct experience of, in fast-moving markets and when still-developing regulation might tilt the playing field in unexpected ways at any time.|
|As the top echelons of Barclays’ senior management gathered in Canary Wharf, one asked 'Has anyone told Antony?'|
One of the many recently-departed senior Barclays bankers said:
I think he’s a better man than his predecessor to try it [restructuring]. But he’s a retail banker. If he was running a purely retail bank he would be a huge success. But I fear others may mislead and take advantage of him. Tom King [head of the investment bank] is in the same boat, a corporate financier running an investment bank still largely dependent on its markets businesses and especially debt markets. They have made mistakes on people in senior management positions, on pay and on some of the tough choices that remain still to be taken.
Barclays is now a sub-scale global investment bank. It’s probably easier to see where it will have to be in three years – smaller, more focused geographically, dealing with fewer clients – than how they will get it there, if it’s still the same people in charge.
Another senior departure told Euromoney:
|You still get the feeling the investment bank is being run for employees more than for shareholders. Why, for example, did Barclays apparently pay Eric Felder [ex Lehman veteran who rose to run all the markets businesses in April 2014, before leaving the firm in April this year for a hedge fund] a small fortune just weeks before he was out?|
|Investment bankers will always try it on. When they tell you how much they need to pay their people so as to avoid a death spiral of departures, that’s just a negotiating position. The first response of senior management always has to be: 'No way. Go to hell.’ Remember that many of the senior people at the investment bank have already earned far bigger fortunes out of Barclays than Antony Jenkins ever will. If you cave in to these people, they’ll only assume they can do what they like.|
Another Barclays veteran says:
|Barclays needs to accrete capital because the regulatory charges on the markets business in the investment bank are still only going one way from here and that’s up. Barclays has to be much tougher now on capital allocation. Why is it still investing in Asia when its market share there is de minimis and that capital could be better deployed where it might actually earn a return and so help build a cushion to ride out the volatility in investment banking?|
Tom King, chief executive of the investment bank, tells Euromoney:
|With the benefit of hindsight you could always think one or two things we might have done differently in regards to the restructuring. For instance, we came into it with a very noisy P&L and maybe we could have been more clear about restructuring costs and timing.|
Here was Antony Jenkins’ message to investors impatient for Barclays’ restructured investment bank to improve returns:
|Big turnarounds take time. I came back to Barclays in 2006 to run Barclaycard, a business that had declined from making £850 million of profit in 2004 to just £380 million that year. It took two years to turn Barclaycard around and another year after that to really get it going again.|
Read the story in full:
One year on from its big restructuring announcement, Barclays is still struggling to convince that it has found the right model. Investment banking remains the sticking point. Senior executives in the division say they’ve pulled off a £100 billion restructuring and improved the client franchise. They want to invest for growth. But sceptics say that bull market conditions and accounting sleight of hand have flattered results and the investment bank needs to become even smaller and more focused. The instinct of chief executive Antony Jenkins may be to give the investment bank more time. Shareholders and the new chairman may not be so patient.
But the board eventually lost patience with Jenkins.
July 8, 2015