Barclays’ CEO Antony Jenkins Asked to Consider Splitting the Bank

on Nov 26, 2012

On 26 November the Financial Times reported that a couple of Barclays’ (LON:BARC) biggest shareholders have urged Antony Jenkins, the successor of former CEO Bob Diamond, to split the bank into two separate entities – retail and investment.

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According to the FT, at least three of the 30 shareholders have told Mr Jenkins to follow the example of the Swiss bank UBS, which last month announced it will be slashing its fixed-income investment operations and reduce its workforce by some 10,000 people. “The 20 per cent pop in the UBS share price has got investors’ juices flowing,” said one bank insider quoted by the FT.

At a shareholders seminar the bank organised, several investors expressed “dismay and exasperation” at the unaltered strategy for the investment bank. The FT wrote that Mr Jenkins has been holding one-on-one meetings with investors to receive feedback on Barclays’ operations. The CEO has also launched a major performance analysis, meant to break the bank down into 75 operating units and asses each one’s return on equity and cost of capital. Announcements of a strategy overhaul are expected in February.

!m[Could the British Bank Follow UBS’ Example and Seperate Investment Banking?](/uploads/story/892/thumbs/pic1_inline.png)The FT also quoted another source, a person close to Barclays, who said that it is wrong to think that the views of a few investors are representative. “The feedback from most investors is that they like the mix of the business because it adds stability.” Mr Jenkins has expressed commitment to maintaining a “premier investment bank franchise”, despite a number of scandals that have shaken the reputation of the bank, including Libor-rigging and mis-selling of payment protection insurance (PPIs) to small businesses.

**Qatar Holding Cashes in on Barclays’ Warrants**
According to news agency Reuters, Qatar Holdings has monetised its remaining holdings of 379 million of Barclays warrants as part of its active portfolio management but has not lowered its 6.65 percent stake in the bank. The conversion price for the warrants – instruments that turn into shares – is not known but at Friday’s closing price of £2.53, the shares would be worth £959 million. “We remain a supportive strategic investor in Barclays, and maintain our confidence in the long-term prospects for the business,” the sovereign wealth fund’s chief executive Ahmad Al-Sayed said.

As of 31 October, Qatar Holding owned 813.96 million shares in Barclays and reiterated that the bank remains an important commercial partner. “Barclays welcomes Qatar Holding’s message of confidence in its long term prospects and continues to appreciate the consistent support it has received since Qatar Holding became its largest shareholder,” Mr Jenkins said in one of his statements.
**UK Investigation of Payments Between Barclays and Qatar**
In August it became known that Britain’s Serious Fraud Office (SFO) and the Financial Services Authorities (FSA) have launched investigations into “payments under certain commercial agreements” between Barclays and Qatar. The probe relates to fees paid to the sovereign wealth fund on deals in June and November 2008, when the bank raised around £11.5 billion. The investigations are ongoing.


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