Apr. 24, 2014, 9:32 AM
- "Bonuses up, profits down. Not a headline we would have chosen," said Barclays (BCS) Chairman Sir David Walker at the bank's heated annual meeting today. The contentious action comes following the decision to boost the bonus pool by 10% last year despite a fall in profits. Walker contends to increases were necessary to prevent an exodus of key investment bank staff.
- "Our business was attacked very aggressively by competitors, particularly in the US,” he said, noting one case of a U.S. bond trading desk where two-thirds of the staff and two co-heads threatened to leave.
- "We are paying for Manchester United but we are getting Colchester United," says one small shareholder, summing up the feeling in Royal Festival Hall today.
- Just before the annual meeting got underway: Barclays reports "significant" fall in fixed-income revenue
- Nevertheless, it's a bull market. BCS +0.9% premarket
Apr. 24, 2014, 5:35 AM
- Barclays (BCS) expects to report a "small reduction" in Q1 adjusted pretax profit due to a "significant" drop in revenue from the fixed-income credit and commodities (FICC) operations at the company's investment bank.
- CEO Anthony Jenkins said the decline reflects "difficult market conditions and a strong comparative performance for Q1 last year."
- Barclays' FICC woe echoes the sharp falls in revenue that JPMorgan, Goldman Sachs and Citigroup have suffered at their respective operations.
- However, Barclays' cost-cutting program is beginning to show a "material benefit," Jenkins said.
- Barclays disclosed the information prior to its annual meeting today.
- Shares are +1.1% premarket.
Apr. 23, 2014, 8:08 AM
- Barclays' (BCS) European FICC business would be the hardest hit, says the team, with about 5K job losses. An overall investment bank cut of 7.5K jobs would equate to about 30% of the unit's employees.
- "The U.S. broker-dealers have been far more proactive in attacking this situation than the European peers ... It has to be cross-sectors, trading desks not only commodities, as the very risk-taking nature of the business has fundamentally changed and is not reflected in people stacks."
- FICC revenue fell 17% in 2013, and Bernstein calls it the best thing that could have happened to strategic investors locked in to the company as it "finally pushed management to put on a structural lens to solve a problem that was thought of as cyclical till now."
- Bernstein estimates FICC income will be in the £4.5B-£5.5B range over the next three years, down from the £7.8B average from 2009-2012.
Apr. 21, 2014, 9:01 AM
- Part of an effort to shrink the investment bank, improve ROE, and please regulators, Barclays (BCS) will sell or exit trading in base metals, energy, and agricultural products and fold its precious metals business into its currency trading unit, reports the WSJ. Martyn Whitehead - head of metals and mining sales and Barclays' representative on London's gold fixing panel - will exit as part of the changes.
- The leak comes ahead of a May 8 presentation at which the bank will detail to investors how its plans to remake its investment bank.
- The move isn't a huge surprise, and Barclays won't be the first to exit the high (capital) cost, low-margin business. Earlier this year, the bank shut down its U.S. and European power trading desks.
- Last week: Barclays CFO Tushar Morzaria tells investors the bank doesn't yet have a plan in place for the investment banking unit.
Apr. 14, 2014, 8:01 AM
- Barclays' (BCS) straight-talking new CFO Tushar Morzaria - in recent private meetings with analysts and investors - is surprising attendees by admitting the bank doesn't yet have a plan for what to do with its investment banking unit, reports the WSJ.
- Six-months into his new job, Morzaria - outside of his candor - has earned a reputation as a zealous cost-cutter, "happy to say no" to executives' requests, but it's figuring out what to do with the investment bank that is occupying most if his attention. He has "got to get out a pretty big rifle because the business model was built for an earlier age," says an analyst. "The challenge and question boils down to, do we need this big huge battleship of an investment bank or should we break it up."
- The pressure to do something continues to mount on CEO Antony Jenkins and Morzaria is occasionally mentioned as a future chief at Barclays. Jenkins says he intends to remain CEO "for many years yet to come."
Apr. 7, 2014, 1:13 PM
- Nine months ago, the European Commission accused 13 banks of blocking Deutshce Boerse (DBOEY) and CME from entering the lucrative CDS business between 2006-09, but the banks, reports Reuters, are set to fight those charges at a closed-door hearing next month.
- Should they lose, the banks could be subject to fines of up to 10% of their global CDS turnover - not a small amount given the size of the market.
- Those charged and expected to fight: C, GS, DB, BAC, BCS, BNPQY, CS, HSBC, JPM, MS, RBS, and UBS.
Apr. 7, 2014, 12:30 PM
- Avoiding what could have been an embarrassing trial later this month over claims top management was aware of attempts to rig Libor, Barclays (BCS -1.8%) reaches about a £40M settlement with Guardian Care Homes. Several current and former executives at the bank - including former CEO Bob Diamond - had been set to give testimony.
- The legal bill for the defense was expected to be peanuts, but the trial would have been closely watched by regulators and potential plaintiffs all over the world.
- Several months ago, Barclays lost its attempt to have the Libor element of Guardian's case tossed
Apr. 1, 2014, 4:43 AM
- A group of investors from across the U.S. and Caribbean have filed a class-action lawsuit against 12 banks for allegedly colluding to manipulate currency rates.
- The firms being sued include Bank of America (BAC), Barclays (BCS), Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), HSBC (HSBC), JPMorgan (JPM), Morgan Stanley (MS) and RBS (RBS).
- The investors include city and state pension plans such as the City of Philadelphia and the State-Boston Retirement System.
- The suit adds to multiple investigations by international authorities into forex manipulation, the latest being the Hong Kong Monetary Authority.
Mar. 31, 2014, 12:27 PM
- Absent reforms, another financial crisis is likely to leave taxpayers on the hook for hundreds of billions, warns the IMF, estimating the world's biggest banks receive up to $590B in implicit public subsidies because of their TBTF status.
- Said subsidies include bankers who still have a "heads I win, tails you lose" attitude, and investors who lend at lower cost to banks than they might otherwise. The IMF calculated the size of the subsidies by comparing the CDS prices and credit ratings across larger and smaller banks. While the amount has fallen since the crisis, it still remains sizable. "All in all ... the expected probability that systemically important banks will be bailed out remains high in all regions."
- Subsidies for the biggest players are "like insurance for which banks don't need to pay a premium," says senior IMF analyst Gaston Gelos.
- Full report (starting on pg. 34)
- Among the usual suspects: BBVA, BBD, BAC, BCS, BK, BNS, C, CS, DB, GS, HSBC, IBN, ING, JPM, LYG, MS, NBG, RY, STT, TD, UBS, WFC, WBK.
Mar. 31, 2014, 2:40 AM
- Switzerland's competition commission, WEKO, is investigating several Swiss, U.K. and U.S. banks over the possible manipulation of forex markets.
- Banks being probed include UBS (UBS), Credit Suisse (CS), Julius Baer (JBARF), JP Morgan (JPM), Citigroup (C), Barclays (BCS) and Royal Bank of Scotland (RBS).
- WEKO started a preliminary inquiry in October, joining other authorities from around the world in investigating possible currency rigging.
Mar. 30, 2014, 3:02 AM
- A judge has ruled that a group of banks that includes JP Morgan (JPM), Citigroup (C), Barclays (BCS) and UBS (UBS) must face a class-action lawsuit that they rigged yen-denominated benchmark interest rates from 2006-2010.
- However, District Judge George Daniels dismissed related claims against the banks for antitrust violations and unjust enrichment.
- UBS, Barclays and RBS have already reached settlements with authorities for the manipulation of such rates.
Mar. 26, 2014, 12:27 PM
- "You have to be the grit in the oyster, you have to be the person who asks the difficult questions," says "corporate philosopher" Roger Steare, aka "Weirdy Beardy," the man tapped by U.K. lenders like RBS, HSBC, and Barclays (BCS) to help improve banker behavior.
- He's also been called upon by the U.K. Financial Conduct Authority which - after observing that banks simply circumvent many new rules - is trying a new tack: Stop making so many, and instead put the onus on banks to create self-regulatory work environments. "Red tape is more easily hurdled than principles," says FCA boss Martin Wheatley.
- A former banker who quit because it was too boring, Steare eventually moved into executive coaching. "Banks are medieval institutions, they are not democracies," he says. "Their clients are the peasants."
Mar. 26, 2014, 10:52 AM
- Shareholders should vote against the re-election of Barclays' (BCS -1%) compensation committee chairman John Sunderland, as well as oppose the bank's pay awards for 2013, says the U.K.'s Local Authority and Pension Fund Forum.
- “In the year that shareholders had to put in £5.8B by way of rights issue, most of that has left the bank in bonuses," says LAPFF head Kieran Quinn. The group advises local government funds with about £125B in assets. Barclays paid 2013 bonuses at about triple the dividend, he says, vs. about 2.5x at HSBC.
- Sunderland - who has been asked by the board chairman to serve until 2015 - has pointed to the high resignation rate of senior staff and the lack of "pay competitiveness."
Mar. 19, 2014, 7:26 AM
- Barclays (BCS) began weighing its options on the unit - Index Portfolio and Risk Solutions - after being approached late last year by MSCI, reports Bloomberg. Expected to make an offer is CME Group, which has also approached the bank about IPRS.
- The Aggregate Bond Index (ETF: AGG) may be the best known benchmark managed by IPRS, which also has a set of indexes acquired as part of Barclays' purchase of assets from Lehman after the collapse.
- The business could fetch around $400M, say Bloomberg's sources.
Mar. 18, 2014, 2:45 PM
- The money includes bonuses, so-called role-based pay, and deferred compensation built up over the last five years. The payouts come as Barclays (BCS +1.9%) draws plenty of criticism for boosting 2013 bonuses after reporting a big Q4 loss, and after announcing up to 12K job cuts this year, or about 8% of its workforce.
Mar. 17, 2014, 2:47 PM
- Ouch. Pending internal investigations into rate-rigging, Barclays (BCS +0.4%), Citigroup (C +1.7%), and RBS (RBS +1.5%) have put a hold on the bonuses of several members of their foreign exchange trading teams, reports the FT. Individual members have not been singled out - instead payouts have been frozen across entire teams until the probes are concluded.
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Barclays PLC is a financial services provider engaged in personal banking, credit cards, corporate and investment banking and wealth and investment management. It operates in Europe, the Americas, Africa and Asia.
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