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Barclays CEO Venkat says pursuing ‘more balanced’ bank to boost returns
Global Banking and Finance Review
Company
By Megan Davies
DAVOS, Switzerland (Reuters) -Barclays CEO C.S. Venkatakrishnan is looking to use the lender’s first investor day in a decade to show shareholders it can replicate the success of its investment bank across other divisions to create a stronger, more balanced lender.
“…the investment bank has been successful but it’s about 60% of the bank, which is one of the things that I think dampens the valuation,” Venkat told delegates at an event hosted by the Wall Street Journal at the World Economic Forum in Davos.
“We need to do better and be clear about what we’re going to return to shareholders. And that’s what the investor day is about. Clarity on growth, clarity on returns, clarity on the makeup of the bank,” he said.
Barclays is due to present an investor update on Feb. 20 after more than a year of studying ways to jumpstart a valuation that has trailed its major European banking peers.
While its transatlantic investment bank has performed in recent quarters, the unit’s cost of capital and volatility of returns has spooked some investors, sparking debate on whether Barclays could reduce its overall risk and improve its share price by paring the investment banking business.
“So in part they’re right in the diagnosis, then you have to ask what’s the cure?,” Venkat said, during a discussion about how big Barclays’ investment bank should be relative to its consumer and corporate interests.
“In the UK, which is the core of our being for 330 years, we’ve got to be a preeminent bank. Any strong global bank has to be really good in its domestic market and that has to be the core of our ambition,” he added.
(Reporting by Megan Davies, writing by Sinead Cruise in London, editing by Christina Fincher)
Shareholder returns refer to the profit generated for shareholders from their investment in a company, typically through dividends and stock price appreciation.
Corporate strategy is the overall plan for a company that outlines how it will achieve its goals, including decisions on resource allocation, business activities, and market positioning.
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