Antony Jenkins, the straight-laced ethics champion boss of Barclays, has been sacked by the board following a bust-up over strategy.
It's not often that such a big cheese gets the push in such a straightforward fashion. So what happened? In a nutshell, the board seems to have decided that it can’t afford to wait for Jenkins' rehabilitation strategy to deliver, and that it would rather Barclays be a profitable bad guy that a penurious goodie two-shoes.
Here’s the MT balance sheet on Jenkins’ three years in the saddle.
Share price: Under Jenkins Barclays' share-price has done respectably, up 70% since he took the helm back in the dark days post- Bob Diamond in 2012. That’s quite a lot better than, for example Deutsche Bank, but some way short of UK rival (retail-only) Lloyds.
Reputation: Jenkins earned his nickname Saint Antony for the high ethical tone of his leadership, exhorting his staff to rediscover their moral compasses and endeavour to do the right thing rather than the most lucrative thing. His schoolmasterly approach was far from universally popular, but it certainly helped to rehabilitate one the UK’s largest employers at a time when, reeling from the worst run of corporate disasters in its history, it badly needed some good news to deliver.
Brand: Considering that Barclays' rate-fixing skeletons have continued to rattle out of the closet (in May it received the biggest ever fine in UK bank history, £284m), Jenkins has done a decent job of keeping the Barclays brand buoyant, especially as an employer. Apprentice schemes, digital eagles, good works in Africa - arguably his real legacy to his successor (McFarlane will be chairman and CEO for now) is the social license to get back to banking business as usual.
The numbers: Barclays' key figures - return on capital and costs - are shocking. The bank’s adjusted returns for last year were just 5.1%, miles off the target of 12.5%, while its ratio of costs to income is a whopping 70%. This must be at the heart of the decision to fire him - after three years in the hot seat, shareholders have had enough of jam tomorrow and want some jam today.
The i-bank: when Jenkins got the job, investment banking was a pariah business, and his background as an untainted retail banker made him the ideal candidate. His big idea was to retreat from the wilder frontiers of casino capitalism and to retrench as a much more consumer-focused ‘boring bank.’ But now the world has changed, and that strength has become a weakness - investment banking still supplies 43% of Barclays' £25.3bn annual revenues and the board clearly reckons that lucrative opportunities are being missed because Jenkins doesn’t understand the business.
Decision making: Doing the right thing, it seems, is a surprisingly turgid and complicated affair - Barclays now has no fewer than 375 management committees thanks to Jenkins' enthusiasm for layers of process. ‘It is not efficient’ as senior independent director Mike Rake put it.
Cost cutting: This is not proceeding at anything like a fast enough rate for new chairman McFarlane, who has a reputation as a ruthless turnaround merchant to protect (at his previous firm Aviva, only two directors survived his reign). Given that Jenkins has already announced a planned 19,000 job cuts, this would seem to indicate that a jobs bloodbath might well be on the cards.
One thing you have to hand to the Barclays board is the no-nonsense way in which the departure has been handled. Such matter of fact-ness is a rarity in the world of big-ticket boss jobs and makes a refreshing change. So perhaps Jenkins has taught them something about openness and honesty after all.
And sneaking the news out on the morning of budget day is a canny move too - presumably McFarlane, Rake et al are hoping that by the time the Chancellor sits down this afternoon, everyone will have forgotten about Barclays…