Activist investor Edward Bramson is calling on Barclays (LON:BARC) to end the bulk of trading activities at its investment banking division, Reuters has reported. The news comes after Bramson’s Sherborne Investors snapped up a little over five percent in the blue-chip lender earlier this year.
Barclays’ share price has been little changed in today’s session, having inched 0.07 percent lower to 208.86p, marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.17 percent lower at 7,775.11 points. The group’s shares have lost more than one percent of their value over the past year, as compared with about a 4.5-percent gain in the Footsie.
Activist investor push
Investors briefed by New York-based financier Edward Bramson told Reuters that he wanted Barclays to axe all parts of its investment banking operation which did not directly serve corporate clients. The plan would see the lender keep its M&A advisory business and the equity and debt capital markets teams responsible for leading high-value initial public offerings and bond sales, while culling its cash equities, currency and fixed income trading desks.
“The trading businesses lack scale, absorb too much risk capital and deliver too small a return,” one of the sources familiar with Bramson’s plan told the newswire, adding that the “route back to success and respectability” for Barclays was to “focus on the retail bank, Barclaycard and the good bits of the corporate and investment bank”.
Analysts on Barclays
JPMorgan Chase, which rates, Barclays as a ‘buy,’ set a price target of 250p on the shares this week. According to MarketBeat, the FTSE 100 lender currently has a consensus ‘buy’ rating and an average price target of 226.94p.