Thursday, July 09, 2015

Barclays bank is back to its old tricks again – You couldn’t make it up!



So farewell, Anthony Jenkins.

You didn’t last long, but then, you were never intended to.

You were made Godfather in a cynical attempt by the Barclays Organised Crime Family, after the previous Capo di Tutti Capi, Don Roberto Diamente, was rubbed out in a hit organised by the supervising Cupola of the Bank of England and the Financial Services Authority, with the primary aim of calming the troubled waters caused by Don Roberto, whose aggressive (but very profitable tactics) had proved to be a little too spicy, even to the sophisticated tastes of the Square Mile.

After the family was rocked by an interest rate rigging scandal, you said bonuses and performance would in future be assessed against a new "Purpose and Values" blueprint.
The problem was that ‘Purpose and Values’ in the way you meant it didn’t have much resonance with your ‘button men’. No doubt a number of your soldiers and caporegimes thought that you were losing the plot when you said in a memo to your 140,000 people;

"I have no doubt that the overwhelming majority of you ... will enthusiastically support this move. But there might be some who don't feel they can fully buy in to an approach which so squarely links performance to the upholding of our values," 

"My message to those people is simple: 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." 

Barclays reputation for effective criminal banking tactics was confirmed after it was fined £290m in June 2013 for rigging Libor interest rates, but the degree of nonchalance demonstrated by the heads of the family and Signor Diamante towards this criminal episode unearthed long-standing concerns by Britain's financial regulator about its culture. 

You said that you were putting five values at the heart of your plan: respect, integrity, service, excellence and stewardship, but that is where you got it badly wrong.

Barclays has never been interested in these bromides, the goodfellas have only ever wanted to make a shed-load of money by any means at their disposal, and your methods of trying to recreate an ethical bank are not wanted or respected by your caporegimes. They have been listening to the family and the message they have been getting is  ‘dat we ain’t earning enough money and we are losing respect on da street’!

So, frankly Tony, you have got to go!

There have been serious rumblings before now.

Some scribbler called Abigail Hofman, has been reported as writing in March 2014 that ‘Barclays under Antony Jenkins is a mess in transition. Some have dubbed Antony Jenkins' reign at Barclays a work in transition. To me, it is undoubtedly a mess in transition.’

Having had the contract firmly put out on you, Ms Hofman rubs in the message by saying;

‘In the war for talent, I am not sure if Jenkins is a hypocrite or if he has lost control of his troops. Indeed, did Jenkins ever have any real control over the investment bank’s senior staffers, most of whom date back to the good-old, bad-old Diamond days?’

With friends like her Tony, no wonder you were de-fenestrated!

Joking apart, and the temptation to continue the mafia image is almost too good to resist, Antony Jenkins, the man who had the temerity to introduce the concept of business ethics to Barclays Bank, has been routinely sacked by the board following a major break-down in relations.

It's not often that such a senior operative gets the concrete overcoat so crudely!

Well, it seems that the board have decided that it can’t get excited about ethics and social rehabilitation, and that it would rather Barclays be making a great deal of money by any dirty means, than being an altar boy at his first communion!.

So, we must now wait and watch while Barclays and its foot soldiers go back into the investment banking market and start making some more dubious money.

Let us review just a few of the facts of life as far as this criminogenic bank is concerned..
In 2014, Barclays collected fines of  £37.7m from the Financial Conduct Authority and $15m from the Securities and Exchange Commission – for compliance failings, some dating back to the takeover of units of Lehman Brothers in 2008.

The SEC said Barclays will have to hire an independent compliance consultant in the US as part of the range of remedial steps the lender agreed to take in order to put things right.

The last time Barclays was in trouble with the FCA it was over the Gold Fix, for which it received a £26m (€33m, $43m) fine. The combined tally of penalties incurred since around June would have been closer to £100m had Barclays not been so co-operative.

Cooperative, well that’s one way of putting things. The Barclays model has been to carry on doing business in a wholly unprincipled and compliance adverse way until they get nicked, and then sooner than contest any issues, they just cough up a plea of guilty and pay the fines, thereby getting a discount for cooperative behaviour.

Barclays clearly look upon regulatory fines as just a cost of doing business.
But this is still small compared to the £290m fine for Libor rate fixing Barclays earned in June 2012.

Barclays has also paid back significant sums running into millions of pounds for PPI fraud, that is the deliberate act of cheating their retail clients out of their money when arranging loans or credit card agreements, by tricking them into purchasing worthless insurance policies which purport to cover their repayments in the event of an illness, but which prove to be unusable if a client ever bothers to try.

No, Barclays is a bank that has routinely cheated its clients, and looks upon the wholesale and investment markets as an opportunity to make a great deal of money dishonestly.
Under former caporegime, Don Roberto Diamante, Barclays routinely posted significant profits. In 2010. bankers at Barclays were handed a bumper payout of £1.5 billion in cash bonuses as the bonus pool doubled and the bank posted record annual profits.

The banking giant posted eye-watering profits of £11.6 billion for 2009 this morning- up a massive 92 per cent on last year. 

These figures were buoyed by its investment banking arm, BarCap, where top investment bankers shared a bonus and pay pool of £4.5bn, almost double the previous year.

Just 23,000 of the firm's top investment bankers shared a bumper payout of £2.1 billion in bonuses with the average BarCap employee receiving a £95,000 payout.

Anthony Jenkins was brought in to try and bring some semblance of honesty and integrity back into the Barclays structure. The Investment arm of the bank was seen as an area of concern, and Jenkins announced his intention to redefine the Barclay’s message, focussing on ‘Purpose and Values’.

Well, that has clearly proven to be an unsuccessful business model as far as the Board and the shareholders of the bank are concerned.

According to Kemal Ahmed of the BBC, ‘Antony Jenkins, the chief executive of Barclays, has been fired after falling out with the board over the bank's cost cutting and profitability.
Board members are believed to have wanted bigger cost cuts and more focus on the investment bank's performance.

Chairman John McFarlane said the bank needed to become more efficient: "What we need is profit improvement. Barclays is not efficient. We are cumbersome."

Barclays said a "new set of skills" was required at the top.

This is city-speak for more savage job-cutting and a new focus on short-term profits to meet the greed of its institutional shareholders.

No talk now of ethics or moral transparency, the focus is all on the bottom line.

Well, as I have been saying for some time now, banks have discovered that they can’t make the kind of revenue returns they were used to making, by using ethical business models. Barclays has just been the first bank to publicly admit that.

Quite where this leaves the much-vaunted and heavily trumpeted Centre for Business Excellence with its focus on ethics and banking sustainability that Barclays were reported to be setting up in partnership with the Judge Business School in Cambridge.

No doubt this was just another piece of smoke and mirrors as I wrote at the time. I mean, it’s not going to be easy trying to persuade the public that you are still committed to a dynamic ethical and honest banking course at a leading university, when you have just sacked the architect of the project.

So, let us sit back and watch what happens, as Barclays begins to deconstruct the methods and systems that Anthony Jenkins was seeking to import to make Barclays a more ethical and honest bank, a feature which has suddenly and so rudely snatched from him.

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