Barclays Bank (BARC)

[dealtn]

We all have our prejudices, and previous bank management behaviour has earned it in spades, IMO. They have a lot to do to earn back trust, so a little sceptical humour at their expense is trivial.

If you look at the comments on the BBC report of Barclays results, they are in a different league to my mild knocks!

I suspect the previous management behaviour you refer to may be from before this management team was in place. Without elucidation that is only a guess though.

Jes Staley the CEO was appointed 5 years ago. Nigel Higgins, the Chariman has been in that role about a year. Tushar Morzaria has been there around 7 years.

What is the issue you have with the Board and their behaviour?

It is banks generally, particularly RBS, HBOS/Lloyds etc. But the same poor culture to some extent existed in Barclays. You only have to look at the attitudes demonstrated in the evidence in the recent Amanda Staveley case. There were obviously good guys and bad guys in all the banks. With Barclays Varley seems to have been a principled man, but Roger Jenkins – ugh. The press seemed to think that Bob Diamond at Barclays was virtually forced out by the BoE.

At RBS Fred Goodwin epitomised what was wrong and look at the well documented appalling behaviour at HBOS/Lloyds forcing small business customers into insolvency and then ripping them off.

I have personal experience of very unprincipled behaviour at RBS by junior management. Changing the MD does not change middle management – corporate culture is very hard to change.

Lastly I should next month get another payment from the RBS Rights Issue litigation, where it was clear the prospectus was fra***** and RBS had to pay £200m in compensation to those shareholders like me who sued them.

So as I say, banks have a long way to go to earn back trust and it isn’t enough to say Jes Staley, for example, has not done anything wrong. It takes decades to build up a good corporate ethos and reputation but only a short time to lose it.

I agree with much of that, and have experienced much of that culture too, albeit on the inside. If I am honest a lot of that culture did change, and quite quickly, and in many cases not for the best, post the 2007/8 "crisis". The big challenge I would see is allowing the culture to change again (and that of regulators, politicians, and public too) such that banking, making money, providing profitability etc. is desirable and achievable.

But to expect culture changes to be reflected in Bank results, and with respect to dividend announcements is frankly laughable

[scrumpyjack]

Thanks. I wasn't actually expecting any dividend as I thought the BoE rules were drawn so tightly it wasn't possible.
My remark was meant to be flippant rather than a serious comment on the results.

[Dod101]

In some ways we need better and more regulation of the banks and not just in solvency ratios and so on. If the culture in the banks was right solvency ratios and the like would be the fundamental concern of the Directors. Everyone involved in bank regulation at the time of Fred Goodwin and his Chairman George Matthewson and the shambles that was HBOS should be hanging their heads in shame. There simply was no regulation of the banks at that time. They could and did literally what they liked.

That sort of culture takes years to eradicate, just like the culture with many contractors, house builders and so on. Lloyds and HSBC were the only banks that had a semblance of responsible management. That is why so many of us are still very sceptical of reports that banks have reformed.

Dod

[dealtn]

In some ways we need better and more regulation of the banks and not just in solvency ratios and so on. If the culture in the banks was right solvency ratios and the like would be the fundamental concern of the Directors. Everyone involved in bank regulation at the time of Fred Goodwin and his Chairman George Matthewson and the shambles that was HBOS should be hanging their heads in shame. There simply was no regulation of the banks at that time. They could and did literally what they liked.

That sort of culture takes years to eradicate, just like the culture with many contractors, house builders and so on. Lloyds and HSBC were the only banks that had a semblance of responsible management. That is why so many of us are still very sceptical of reports that banks have reformed.

Dod

There simply was regulation of banks at the time.

There literally was plenty we didn't do and we couldn't do what we liked.

Honestly the passage of time doesn't make these kind of statements true or useful.

A useful culture to change is the lazy view of what banks were like in the past.

[Dod101]

In some ways we need better and more regulation of the banks and not just in solvency ratios and so on. If the culture in the banks was right solvency ratios and the like would be the fundamental concern of the Directors. Everyone involved in bank regulation at the time of Fred Goodwin and his Chairman George Matthewson and the shambles that was HBOS should be hanging their heads in shame. There simply was no regulation of the banks at that time. They could and did literally what they liked.

That sort of culture takes years to eradicate, just like the culture with many contractors, house builders and so on. Lloyds and HSBC were the only banks that had a semblance of responsible management. That is why so many of us are still very sceptical of reports that banks have reformed.

Dod

There simply was regulation of banks at the time.

There literally was plenty we didn't do and we couldn't do what we liked.

Honestly the passage of time doesn't make these kind of statements true or useful.

A useful culture to change is the lazy view of what banks were like in the past.

I do not understand probably because it is too late at night or because the comments by dealtn above make no sense to me. Maybe he can explain in due course.

Dod

[dealtn]

I think it's your comments that make no sense and need justifying.

You claim there "simply was no regulation of banks at the time". I worked for a bank, was involved in quarterly reports (for my section) for the regulator(s). I was involved in setting up a new business within a bank. That took considerably longer than a year and had considerable interaction with the regulator(s). It is inconceivable other banks didn't have the same kinds of interactions and obligations.

You make a claim "they could and did literally what they liked", so unless literally means something else to you its a facile generalisation at best and not even close to the reality.

Even then it is amazing how events, and perceptions about them, that are now over a decade old get trotted out regularly, especially so on a Board that is supposedly about "News". Its generally not even true, and the proportion that is would be "old news" anyway.

[Dod101]

Well to take one simple and very obvious example, the excesses of Fred Goodwin. No responsible bank management would have got into the mess he did. What happened was not an act of God; it was a deliberate act by him and the management in RBS at the time. Clearly the regulators were not up to the job and Fred Goodwin could do and did what he liked. This is though well off topic so I had better leave it there but I could go on in a more appropriate forum.

Dod

[dealtn]

Well to take one simple and very obvious example, the excesses of Fred Goodwin. No responsible bank management would have got into the mess he did. What happened was not an act of God; it was a deliberate act by him and the management in RBS at the time. Clearly the regulators were not up to the job and Fred Goodwin could do and did what he liked. This is though well off topic so I had better leave it there but I could go on in a more appropriate forum.

Dod

Difficult to disagree with the statement the Regulators (and others) weren't up to the job. That's a lot different to "could do and did what he liked" (and applied to the entire banking sector too, not just, arguably, the worst bank and leader within it).

[ADrunkenMarcus]

the excesses of Fred Goodwin.

The thing that annoys me is I am sure I could have done an equally good job of bankrupting the bank. And I'd have done it for half Goodwin's salary!

Best wishes

Mark.

[Dod101]

Well to take one simple and very obvious example, the excesses of Fred Goodwin. No responsible bank management would have got into the mess he did. What happened was not an act of God; it was a deliberate act by him and the management in RBS at the time. Clearly the regulators were not up to the job and Fred Goodwin could do and did what he liked. This is though well off topic so I had better leave it there but I could go on in a more appropriate forum.

Dod

Difficult to disagree with the statement the Regulators (and others) weren't up to the job. That's a lot different to "could do and did what he liked" (and applied to the entire banking sector too, not just, arguably, the worst bank and leader within it).

The point is of course that the regulators should not be there to act as policemen they ought to be there simply to set the standards and are surely entitled to expect that the banks and their management would adhere to those. As it is Fred Goodwin could do and did what he liked; that is demonstrably the case, and if we were to award medals for the worst run bank, HBOS would in my book be first equal with RBS.

As an example of a well run bank the old (Est 1695) Bank of Scotland was tops I think, especially under Sir Bruce Pattullo.

Dod

[dealtn]

Well to take one simple and very obvious example, the excesses of Fred Goodwin. No responsible bank management would have got into the mess he did. What happened was not an act of God; it was a deliberate act by him and the management in RBS at the time. Clearly the regulators were not up to the job and Fred Goodwin could do and did what he liked. This is though well off topic so I had better leave it there but I could go on in a more appropriate forum.

Dod

Difficult to disagree with the statement the Regulators (and others) weren't up to the job. That's a lot different to "could do and did what he liked" (and applied to the entire banking sector too, not just, arguably, the worst bank and leader within it).

The point is of course that the regulators should not be there to act as policemen they ought to be there simply to set the standards and are surely entitled to expect that the banks and their management would adhere to those. As it is Fred Goodwin could do and did what he liked; that is demonstrably the case, and if we were to award medals for the worst run bank, HBOS would in my book be first equal with RBS.

As an example of a well run bank the old (Est 1695) Bank of Scotland was tops I think, especially under Sir Bruce Pattullo.

Dod

I worked for both, and agree Bruce was an outstanding individual, leaving us too early sadly. I can tell many stories about HBOS, but still think much of its demise is misunderstood, and misappropriated. I am not sure this site, let alone this thread, is the appropriate place for such divulgences though!

[scrumpyjack]

I see Amanda Staveley has lost her case against Barclays in the High Court. She was suing them, for about £1 billion for alleged fees for helping in the Arab fund raising which enabled Barclays to avoid taking a State bailout in the GFC, much to the annoyance of the BoE. The claim gradually reduced during the trial to £600-£800 million. None of the players seemed to come out it well. Roger Jenkins of Barclays and Amanda herself, in particular.

https://www.bbc.co.uk/news/business-56208668

[scrumpyjack]

Further to that, despite dismissing Amanda's claim, the judge found Barclays guilty of 'serious deceit'

"Judge David Waksman found that the bank seriously deceived her about the terms of the 2008 investment at the centre of the case. He also criticized former Barclays executives Roger Jenkins and John Varley." (per Bloomberg)

She lost her case because he decided that even if they hadn't deceived her, she would not have had the resources to complete the transaction.

I am surprised at Varley but not Jenkins

[idpickering]

Directorate Change

Barclays and Mr Jes Staley, Group Chief Executive, were made aware on Friday evening of the preliminary conclusions from the FCA and the PRA of their investigation into Mr Staley's characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein and the subsequent description of that relationship in Barclays' response to the FCA. In view of those conclusions, and Mr Staley's intention to contest them, the Board and Mr Staley have agreed that he will step down from his role as Group Chief Executive and as a director of Barclays. It should be noted that the investigation makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein's alleged crimes, which was the central question underpinning Barclays' support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.

The Board is disappointed at this outcome. Mr Staley has run the Barclays Group successfully since December 2015 with real commitment and skill. Supported by the senior team which he largely helped build and on whom the Barclays Group will be relying for the future, Mr Staley clarified the Barclays Group's strategy, transformed its operations and materially improved its results. The regulatory process still has to run its full course and it is not appropriate for Barclays to comment further on the preliminary conclusions.

With effect from 1 November 2021, Mr C.S. Venkatakrishnan (known as Venkat) will take over as Group Chief Executive, subject to regulatory approval, and as a director of Barclays. The Board has had succession planning in hand for some time, including reviewing potential external appointees, and identified Venkat as its preferred candidate for this role over a year ago, as a result of which he moved from the position of Group Chief Risk Officer to Head of Global Markets. The Board has long been confident in Venkat's capabilities to run the Barclays Group and is delighted to have such a strong internal candidate. The Board is confident that Barclays under his leadership will continue its strategic direction and improve performance in line with the progress of recent years.

https://www.investegate.co.uk/barclays- ... 00148231Q/

[scotia]

Directorate Change

Barclays and Mr Jes Staley, Group Chief Executive, were made aware on Friday evening of the preliminary conclusions from the FCA and the PRA of their investigation into Mr Staley's characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein and the subsequent description of that relationship in Barclays' response to the FCA. In view of those conclusions, and Mr Staley's intention to contest them, the Board and Mr Staley have agreed that he will step down from his role as Group Chief Executive and as a director of Barclays. It should be noted that the investigation makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein's alleged crimes, which was the central question underpinning Barclays' support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.

The Board is disappointed at this outcome. Mr Staley has run the Barclays Group successfully since December 2015 with real commitment and skill. Supported by the senior team which he largely helped build and on whom the Barclays Group will be relying for the future, Mr Staley clarified the Barclays Group's strategy, transformed its operations and materially improved its results. The regulatory process still has to run its full course and it is not appropriate for Barclays to comment further on the preliminary conclusions.

With effect from 1 November 2021, Mr C.S. Venkatakrishnan (known as Venkat) will take over as Group Chief Executive, subject to regulatory approval, and as a director of Barclays. The Board has had succession planning in hand for some time, including reviewing potential external appointees, and identified Venkat as its preferred candidate for this role over a year ago, as a result of which he moved from the position of Group Chief Risk Officer to Head of Global Markets. The Board has long been confident in Venkat's capabilities to run the Barclays Group and is delighted to have such a strong internal candidate. The Board is confident that Barclays under his leadership will continue its strategic direction and improve performance in line with the progress of recent years.

https://www.investegate.co.uk/barclays- ... 00148231Q/

Further information on Mr Staley - from the BBC news site

Under the terms of his contract with Barclays, Mr Staley will receive 12 months' pay, totalling £2.4m, as well as his pension allowance of £120,000 for the year, and any other benefits.

And also on the BBC News Site, a quote from Simon Jack, the BBC Business Editor

In 2018, Mr Staley was fined £642,000 and Barclays £15m after Mr Staley took it upon himself to instruct the bank's own security unit to track down a whistleblower who had raised concerns about the suitability of the appointment of a former colleague of Mr Staley's. That could have been a straight red card but he escaped with a yellow.

[pje16]

LONDON BRIEFING: Barclays launches delayed GBP1 billion share buyback

(Alliance News) - Barclays said it will kick off a GBP1.00 billion share buyback programme on Tuesday. The programme, initially announced in February, had been delayed in March after the bank admitted it sold more financial products to investors than it was allowed to.

(my edit - oh dear I though those days were over)

The London-based bank said at the time that securities offered and sold under its US shelf registration statement for an approximate one-year period had exceeded a registered amount. This, the bank explained, gave the purchasers of the affected securities a right of rescission, requiring Barclays Bank to repurchase the affected securities at their original purchase price.

Late on Monday, Barclays provided further explanation.

"The provision for over-issuance of US securities is particularly sensitive to equity market movements, however, this would be expected to be substantially offset by hedging arrangements, including specific hedging and overall portfolio positioning," it said.

Barclays said it had found "one material weakness" in its internal controls.

"The material weakness that has been identified relates to a weakness in controls over the identification of external regulatory limits related to securities issuance and monitoring against these limits. As a result of this weakness, BBPLC issued securities in excess of the amount registered under the US shelf," it said on Monday.

Source:
https://www.ii.co.uk/secure/my-news-fee ... 9914720600
login required

[Breelander]

LONDON BRIEFING: Barclays launches delayed GBP1 billion share buyback...

RNS:

Barclays PLC (the "Company") announces that, as outlined in its announcement on 23 February 2022, it will commence a share buy-back programme to purchase ordinary shares of 25 pence each in the Company ("Ordinary Shares") for up to a maximum consideration of £1,000m (the "Buy-back"). The Buy-back will commence on 24 May 2022 and end no later than 30 September 2022 (subject to regulatory approval remaining in place). The purpose of the Buy-back is to reduce the share capital of the Company and therefore Ordinary Shares purchased under the Buy-back will be cancelled.....

https://www.investegate.co.uk/barclays- ... 00075189M/

[idpickering]

Acquisition of Kensington Mortgage Company.

Barclays PLC ("Barclays") today announces that Barclays Bank UK PLC ("Barclays Bank UK") has agreed to acquire UK specialist mortgage lender Kensington Mortgage Company Limited ("KMC") from companies controlled by funds managed by Blackstone Tactical Opportunities Advisors L.L.C. and funds affiliated with Sixth Street Partners LLC.

KMC is a leading UK specialist residential mortgage lender providing mortgages via brokers to borrowers with complex incomes. It uses proprietary technology, data analytics and insight to design products and make lending decisions, focusing on the self-employed and customers who have multiple or variable incomes. The business is based in Maidenhead, has approximately 600 employees and also services mortgages for other parties.

The acquisition will enable Barclays to broaden its product offering and capabilities in the UK mortgage market, extend the number of customers we can serve and grow mortgage originations to better utilise our strong UK funding base.

https://www.investegate.co.uk/barclays- ... 00030418Q/

Ian.

[idpickering]

Q3 2022 Results.

Another quarter of strong returns and income growth.

Strong income momentum and returns across all three
operating businesses

Approaching the challenging macroeconomic outlook with
caution

Focused on delivering high organic capital generation and
returns to shareholders

https://home.barclays/content/dam/home- ... tation.pdf

RNS here; https://www.investegate.co.uk/barclays- ... 00030969E/

Ian.

[ADrunkenMarcus]

Higher interest rates are good news for banks in terms of the net interest margin, but bad PR-wise! I suspect bank profits will be firmly in the sights of the Chancellor, too.

Net asset value per share has been pretty stuck for some years.

Best wishes


Mark.