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Monday 15 July 2019

Barclays boss says activist investor has not laid out demands

CEO Jes Staley also said Brexit will not be resolved until the end.

A general view of Barclays Bank in London (Ian West/PA Wire)
A general view of Barclays Bank in London (Ian West/PA Wire)

By Maryam Cockar, Press Association City Reporter

The Barclays chief executive has said that activist investor Edward Bramson, one of the lender’s largest shareholders, has not laid out his strategy for the bank.

Mr Bramson, through his investment vehicle Sherborne, has built a 5.5% stake in Barclays and is ramping up pressure on the lender to curtail its investment arm.

Chief executive Jes Staley said he had a “reasonable engagement” with Mr Bramson, but he is yet to reveal his plans for the lender.

This backed similar comments made by Barclays’ outgoing chairman, John MacFarlane, who said last month that Mr Bramson has “made some critical points” but that he “hasn’t come up with a solution”.

Speaking to CNBC at the World Economic Forum in Davos, Mr Staley said: “We’ve had a reasonable engagement with Bramson over the last year – we’ll see him again in March. He really hasn’t laid out his strategy to us – we read the press and see what they say”.

Mr Staley maintained that he has the support of shareholders and that the bank is in a “good place”.

“We want to engage with all of our shareholders, and we do, but we had a great year last year – we more than doubled our profitability.

“We more than tripled the amount of capital that we returned to our stakeholders last year, so we are very comfortable with the trajectory of the bank, we think we’ve got, you know, the support of our shareholders, and we’ll engage with Bramson, when he wants to, and exchange ideas, but for now, the bank, I think, is in a pretty good place, and the shareholders are pushing us forward”, Mr Staley said.

On the weekend after the referendum vote we got the whole management team together, and said, ‘We need to be prepared for whatever happens, including a hard Brexit,’ and we have done that Jes Staley, Barclays

As well as fending off activist investors, Barclays has been contending with uncertainty surrounding Britain’s departure from the European Union.

Mr Staley said Brexit is likely to go down to the wire to the March 29 deadline, but the bank is prepared for all outcomes, including a hard Brexit that will see Britain leave the bloc without a deal or transition arrangements.

“The nature of politics is, this will not be resolved until the very end. Nothing is agreed until everything is agreed, and that means we’re going to the 28 or the 29, and we have to deal with that uncertainty.

“On the weekend after the referendum vote, at Barclays we got the whole management team together, and said, ‘We need to be prepared for whatever happens, including a hard Brexit,’ and we have done that”.

Mr Staley identified three groups of MPs in Parliament and said: “You’ve got a very difficult political challenge in the UK, where you have roughly a third, I think, of parliament that wants to roll back Brexit, a third that wants to have a soft landing, and a third that wants to keep all of the optionality open to the British government. We’ll leave it to the political body to figure this out.”

MPs are set for a crunch vote on Prime Minster Theresa May’s so-called ‘Plan B’ Brexit deal on January 29.

Mr Staley also spoke of the challenges in the European banking sector and low investor sentiment for buying bank stocks. Barclays share price has slumped over the last year.

“One of our challenges is we are a European bank, and in fact, if you look at how the sector has traded, whether it’s a bank in Switzerland, or France, or the UK, there has been a trade-off against the European banking sector of extraordinary proportions over the last 12 months. And we are not immune to that.

“What we have to focus on, as a management team, is what we can control.

“The capital level of the bank, the profitability of the bank, the strategy of the bank, and the prospects of the bank, and I feel comfortable where we are.”

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