Barclays: a new era?

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Posted in:Banking and Finance|October 21, 2015 | Join the mailing list

On 3 July 2012 Bob Diamond resigned from Barclays Bank plc (“Barclays”) as a consequence of the LIBOR scandal that brought to the forefront of public awareness the banks’ and financial industries’ practices during the 2005
to 2008 period. He was replaced by Antony Jenkins. Mr Jenkins was allegedly sacked as Chief Executive of Barclays on 8 July 2015. It is alleged in the media that Mr Jenkins was fired as a consequence of his view that the investment banks ought to be “ring
fenced” from the bank retail business (as required by the Government) and was happy with retail and investment banks being separate. His sacking was very unexpected.

On 13 October 2015 Jes Staley was brought into Barclays as its new Chief Executive to replace Mr Jenkins. Barclays new Chairman, John McFarlane has given an interview to the Financial Times setting out the challenges that
Barclays faces.

Of material interest to berg
in this article is the statement by Mr McFarlane that in addition to losing 19,000 jobs from its 140,000 workforce the bank is seeking to "offload" £400 billion of assets.


As has been regularly reported on berg‘s
website and in berg’s
Banking Report 2015: Lifting the Lid off Lending, the problem with banks electing to reduce assets on their balance sheet has resulted in SMEs being treated unfairly, with the allegations against
both Lloyds and RBS that their attempts to reduce their balance sheet has caused enormous damage within the SME sector. We refer to pages 25 (RBS and GRG) and 20 (Lloyds Bank) of our
Banking Report 2015. See also page 3 of

RBS’s annual results for 2014
, in which they identified £243 billion of reductions from its balance sheet. This does not take account of the hundreds of billions that they have reduced from their balance sheet prior to 2014.

Barclays’ balance sheet like RBS’s is £1.5 trillion. They intend removing £400 billion of those assets from that balance sheet. This should cause great concern for any property owning SME customer of Barclays.

It is noteworthy that the Financial Times article identifies the sacking of Anthony Jenkins as being done in a “brutal manner”.

berg believe that the continued attack on SME businesses in the UK can only harm the UK economy. It is true that the banks need to realign their businesses as a consequence of the untrammelled profiteering
shown during the noughties.  However, it appears, once again, that the banks are only targeting SMEs. 

If there are any issues in this update or more generally that you would like to discuss, please contact our Banking & Financial Regulation team on 0161 879
9929 or email help@berg.co.uk




(The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by berg or any of its
partners or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.)
 

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