Barclays' outsider tries to settle in
Barclays' appointment of investment banker Bob Diamond as chairman of Barclays Global Investors last summer indicated the group's commitment to fund management. But can BGI, which only contributes a fraction of Barclays' profits, gain the recognition it wants?
IT CAN'T BE easy being a fund manager in the Barclays group. In the investment world Barclays Global Investors is huge. But in the context of the bank it's small fry.
Last year, when a lot of investment houses were struggling, BGI's profits were up 41%. It made £110 million. But the group's investment bank, Barclays Capital, made £593 million and pre-tax profits of the group as a whole were £3.2 billion.
In the previous year BGI made £71 million out of group profits of £4.1 billion - an even smaller slice of the pie. Barclays initiated a review of the business and considered selling it off. All parties now say that those issues are in the past and both Barclays and BGI are committed to each other, as exemplified by the appointment last August of Bob Diamond, head of Barclays Capital, as chairman of BGI.
Co-chief executives of BGI Andrew Skirton and Blake Grossman are keen to draw a veil over the ownership question and concentrate on how to improve results even further.