By Ian Fraser
Published: Daily Record
Date: 12 February 2014
Most bank chief executives, when describing the need to rebuild their institutions, restore profitability and regain people’s trust in the wake of the global financial crisis, have a habit of spouting meaningless platitudes.
At first the Barclays chief executive Antony Jenkins, installed after the Libor scandal and the ousting of Bob Diamond in June 2012, seemed better than that.
The 52-year-old retail banker gave the impression of having done a lot of soul-searching in the wake of the global financial crisis. He seemed genuinely committed to root-and-branch reform of the Canary Wharf-headquartered banking giant, has taken senior bankers on the financial equivalent of re-education camps, and even gave up his own bonus.
But yesterday Jenkins announced a number of measures which have seriously tarnished his reputation as banking’s Mr Clean and made me wonder whether his is no less full of platitudinous claptrap than his peers.
What sticks in the craw the most is that Barclays said it was paying its 26,200 investment bankers nearly £2.4bn in bonuses for 2013, a 13 per cent rise on the amount it shelled out in 2012. The investment bankers’ bonuses will average of £60,100 per person, with hundreds earning packages of more than £1 million each (the bank also clawed back £176 million worth of bonuses from a few badly behaved bankers)
The hike in overall bonuses might, just, have been acceptable if the bank had been firing on all cylinders. But it is not. Last year the profits made by its “casino” bank, or investment banking unit, slumped by 37 per cent to £2.52 billion. Barclays’ overall profits slumped by one-third to £5.2 billion. So even though the overall pie has shrunk, Jenkins and his co-directors have seen fit to hand Barclays’ investment bankers an even bigger slice, at the expense of investors and other stakeholders.
Jenkins is also making ordinary workers and customers suffer. He declared that Barclays would make 12,000 job losses in the current year – 9% of the workforce – a cull that follows the 7,650 jobs axed by Jenkins in 2013. Unions are furious, and point out that the job losses will lead to a deterioration in customer service.
So it seems that, where pay is concerned, Barclays, remains a prisoner of the demands of senior staff in its investment bank. So Jenkins’ pledges to focus on the creation of better rewards for shareholder must have been disingenuous all along. The Jenkins halo has well and truly slipped.
Ian Fraser’s book, Shredded: The Rise and Fall of the Royal Bank of Scotland, is published by Birlinn in May
An edited version of this article was published on page two of the Daily Record on Wednesday 12 February 2014