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Late Links: How investment banking came to dominate Barclays

Barclays New York

Barclays is penitent. New chief executive Antony Jenkins has put all employees at the bank – investment bankers included, on a strict diet of values and sanctimony.  Today’s £15m report from Anthony Salz on what went wrong at the bank helps explain why.

Salz diagnoses various problems and makes various suggestions for how Barclays could improve in future. He thinks short term revenue growth should play a smaller part in Barclays’ aims, that human resources staff at the bank should be more empowered, that senior management should be more open to hearing bad news from lower down the hierarchy, and that Barclays should ditch ‘institutional cleverness’ in favour of institutional values.

Salz also includes the following illuminating charts showing why Barclays’ investment bankers became important within a sober bank with Quaker roots. Between 2002 and 2012, the investment banking business went from 21% to 40% of Barclays’ revenues. Over the same period, it became the main source of profitability within the bank. Last year, the investment bank generated 85% of profit before tax at Barclays. Rich Ricci, head of Barclays’ investment bank, may be inimical to the new look ‘values-led institution’, but for the moment Antony Jenkins can’t do without him – or his ever-so-clever colleagues.

Barclays business areas

Barclays profits

Source: Barclays 

Meanwhile:

Barclays’ head of prime brokerage, Ajay Nagpal, is joining Millennium in July as chief operating officer. (Financial Times) 

Banks are trying to avoid the EU bonus cap by defining ‘key risk taker’ more tightly. (Bloomberg) 

Bank of America is having a revenue push. (Bloomberg) 

22% of incoming analysts and associates at Bain Capital are now women, compared to 6% three years ago. (Dealbook) 

Moscow City, the banking/business area of Moscow, is nearly finished and will be twice the size of Canary Wharf. (Wall Street Journal) 

The Bank of England’s new banking watchdog has been asked by the Parliamentary Commission on Banking Standards to explain how it intends to limit proprietary trading. (The Times) 

The immense cunning of Goldman Sachs. (CNBC)  

“Women do funny things, like work very hard and expect to be noticed. They’re not, because it doesn’t work like that.”  (Dealbook) 

The great British class calculator. (BBC) 

 

 

 

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