Antony Jenkins, Barclays’ new chief executive, is in the unenviable position of restructuring a badly PR-damaged bank. This is the sort of thing that many business titans actually relish – the chance to clean house, trim the proverbial hedges and start again, with your name on the mast. But, Barclays, like the other major UK high street banks is in a tough predicament – where can they cut costs, not lose their earning potential (investments) and appeal to the public that they really are ‘all about customers service.’ Well, Jenkins is unveiling a new structure for the bank, according to the Financial Times that includes: “cutting at least £2bn from its annual cost base of £20bn as part of a strategic overhaul to be presented by the bank on Tuesday, say bank insiders and analysts.” These cuts will come in the form of over 2,000 jobs on the investment side, and any areas that may be in conflict with the bank’s new code of ethics.
The pressure comes in how Jenkins proposes to keep the bank making a profit. The previous mechanism for that was Barclays’ “tax structuring unit” that was essentially a tax avoidance structure for clients and the bank, which came under intense criticism by politicians and industry insiders as being one of the reasons Barclays has egg on its face. Jenkins’ “Transform Program” has other ideas in place, but many analysts think this is not a massive change in governance or structure, but rather smaller ideas with a positive PR spin attached to it – declining to take his £2.75m bonus and “doubling to £850m its provision for compensation of interest rate swaps mis-spelling, adding £600m to the money set aside to fund payment protection insurance compensation,” is also good for the banks’ image. But, you have to wonder whether it looks good to have the man in charge of your U.S. investment arm named Rich Ricci (not good!). In fact that’s almost as bad for your image as having your CEO named Bob Diamond.