Anyone hoping new Barclays boss Jes Staley would bring back the good (or bad, depending on your opinion) old days of full throttle, Wall Street-style banking may well be feeling disappointed today, as he pledged to push on with the restructuring of the beleaguered investment bank.
After reports of his imminent appointment emerged two weeks ago, the former head of JPMorgan’s investment bank was officially unveiled today as the replacement for ‘Saint Antony’ Jenkins, who was fired in July by slash-happy chairman John McFarlane.
And he struck a measured tone, full of words like ‘trust’ and ‘respect’ – much like the squeaky-clean retail banker Jenkins.
‘I still believe that trust is the most precious asset a bank can have,’ he wrote in a memo to staff. ‘We must therefore complete the cultural transformation of the Group.There can be no retreat from becoming a values driven organisation which conducts itself with integrity at all times.’
Sounds familiar. He also made a bowing and scraping overture to the regulators, which have gone hell-for-leather after Barclays, which reports third quarter results tomorrow, and its rivals over the last few years for misdemeanours from Libor and foreign exchange fiddling to PPI mis-selling. The short version: please stop fining and over-regulating us.
‘My respect for the critical role which regulators play in our industry is unequivocal,’ he said. ‘I have repeatedly said that banks should spend less time preparing for a scenario similar to 2008, and more time working to avoid such situations entirely. Core to that objective is having relationships with regulators that are collaborative, not adversarial.’
So what of Barclays’ underperforming investment bank, which makes around a third of the company’s revenues and profits? Last year, Jenkins announced the unit would shrink from using half the group’s capital to a third, while 19,000 of its 140,000 jobs would be cut. But when he was fired he was widely seen not to ‘get’ the investment bank.
Nonetheless, Staley is apparently not doing a u-turn. ‘We will complete the necessary transformation and repositioning of the Investment Bank to a less capital intensive model,’ he said. So he’s expected, at least in the short term, to speed up the shrinking of the investment bank.
And he’ll be handsomely paid for it: as much as £8.25m a year. That’s £2.75m of fixed pay (£1.2m salary, £1.15m of shares with a five-year vesting period and a £396,000 pension), a bonus that could reach £2.2m and a long-term incentive plan that could be worth £3.3m paid three years later in shares.
Oh and don’t forget the £1.93m in Barclays shares he’s getting to buy him out of unvested JPMorgan shares. Perhaps not surprising then that investors weren’t especially impressed: shares had dipped 0.5% to around 250p at lunchtime.