Can Antony Jenkins get rid of Bob Diamond's legacy at Barclays?
New Barclays boss Antony Jenkins wants the bank to clean up its act, but James Moore asks if anything will really change
Clean up or clear off. That was the message sent to more than 140,000 employees at Barclays, from the lowliest tellers in its branches to the millionaire traders whose primary concern right now is when they might finally get their hands on the restricted stock they've been forced to accept in lieu of their beloved cash bonuses.
In a letter which arrived in all of their inboxes this morning, the new chief executive Antony Jenkins had a stark message for those who won't buy into his TRANSFORM (sic) programme with its five core values of "respect, integrity, service, excellence and stewardship".
"There might be some who don't feel they can fully buy into an approach which so squarely links performance to the upholding of our values. My message to those people is simply: Barclays is not the place for you. The rules have changed. You won't feel comfortable at Barclays and, to be frank, we won't feel comfortable with you as colleagues," he said.
The warning was laid down in the wake of the Libor interest-rate fixing scandal that cost Barclays £290m in fines, as well as its chief executive Bob Diamond and chairman Marcus Agius. Not to mention the reputational damage inflicted by traders' emails promising colleagues bottles of Bollinger for attempting to cook the books.
The bank also last year raised the amount set aside for mis-selling payment protetction insurance to £2bn. And it continues to fight a proposed £291m fine for alleged manipulation of the California energy-trading market.
Over the coming weeks more than a thousand people will be trained to preach Barclays' new message to staff. Even top investment bankers might have to attend re-education sessions.
So is this a sudden return to the venerable institution's Quaker roots?
Some of those who have been close to the bank for some time look at the move with a jaundiced eye. They say that the five core values are remarkably similar to the six "Barclays Behaviours" held up in 2002 as ideals for the bank's staff under the man Mr Diamond replaced as chief executive, John Varley.
They argue that this programme fell away under Mr Diamond and the managers he brought in. Those managers include one Antony Jenkins.
Said one former Barclays employee: "This will only work if the people at the top of the bank live it and if the reward structures are based on living up to it. I'm sure the chairman Sir David Walker does, but the others have to as well.'
Views in the City about that were rather mixed.
One banker said: "I think they genuinely are determined to go way beyond putting in a new layer of controls. They want to engineer a new culture. But that is very, very difficult."
Far from living up to a Quaker, or even a 2002, ideal, others noted that there were commercial considerations at play in Mr Jenkins' letter.
David Buik, the City commentator, said: "He has to do this for three reasons. Firsly, when he took over he said he would. Secondly, he's employed the most expensive compliance officer in the City in Sir Hector Sants [the former head of the Financial Services Authority]. Thirdly, he wants to steal a march on the other banks. While they are fighting fires of their own, Barclays wants to be seen to be stepping up."
As for Barclays' critics outside of the City, David Hillman, a spokesman for the Robin Hood Tax Campaign, said: "This is a hopeful sign that Barclays may finally be waking up to the misery they inflicted by mis-selling products and manipulating interest rates. But it is by their actions not their words that they'll be judged – they need to start serving the interests of wider society, not just feathering their own nest.
"Warm sentiments won't soften the suffering inflicted by the economic crisis – if banks are serious about breaking with the past they must also pay for the damage they've caused."
Whether you believe Mr Jenkins is sincere – and to be fair plenty do – or you take a more cynical view, he's certainly got people talking. All except for the analysts who cover Barclays stock.
They barely shrugged their shoulders. They've seen this sort of thing before. Some are even old enough to remember Mr Varley and his Barclays Behaviours back in 2002. The main event for them will be Mr Jenkins' strategy presentation next month.
The stock market too hardly noticed. Barclays shares finished the day virtually unchanged at 296p.
A number of investors are pressing for a break up the bank. They want the investment arm spun off.
That would not be a terribly palatable route for any chief executive to take, however. For years now it has generated the lion's shares of Barclays' profits. Without it, the bank would still be an important player, but only in banking's second division.
When UBS decided it needed to restore its reputation after an even bigger fine – £900m – for Libor fixing, it sacked thousands of investment bankers as part of a wholesale retreat from large parts of the business. That's highly unlikely to happen at Barclays, whatever its new values are.
It is true Barclays is likely to call time on some of its more controversial businesses, its tax-planning arm, and the trading of certain "soft" commodities, such as grain. But the smart money is on Barclays Investment Bank remaining integral to Barclays Bank.
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