Barclays share price: CEO under pressure as investors worry about strategy

on Oct 9, 2017
Updated: Mar 11, 2020

Barclays’ (LON:BARC) chief executive is facing growing pressure as shareholders lose patience with his investment banking strategy and the bank’s sluggish share price, the Financial Times reports. Jes Staley is further awaiting the outcome of a regulatory investigation into his attempts to unmask a whistleblower.

Barclays’ share price has slipped marginally lower in London in today’s session, having lost 0.24 percent to 189.75p as of 10:08 BST, slightly underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.06 percent lower at 7,518.01 points. The group’s shares have added just under 10 percent to their value over the past year, but are down by some 15 percent in the year-to-date.

While Barclays’ chief executive Jes Staley is looking to increase profitability by expanding the investment bank, several top 20 investors told the FT that they were sceptical of his strategy of throwing more resources at the unit, which is the group’s profitable division and already absorbs more than half its total capital.

“You still have a big chunk of capital tied up in a business that is showing no sign of making a sustainable return of equity above its cost of equity,” a leading shareholder told the newspaper, adding that investors were frustrated at the lack of a clear timeframe for boosting profits. The FT quoted another large investor as commenting that the “investment bank has never returned its cost of capital”.

“If I was the board I would want to be vigilant that Jes doesn’t get too bullish and carried away with the investment bank,” the shareholder added.

The comments come at a sensitive time for Staley who is currently being investigated over his attempts to uncover a whistleblower at the bank. The FT reports that UK regulators are expected to deliver the results of their probe in the coming weeks. 

As of 10:38 BST, Monday, 09 October, Barclays share price is 189.20p.