Shares in Barclays are bouncing following the announcement of chief executive officer’s Anthony Jenkins departure but their long-term performance will depend on what plans the new boss has for its investment banking operation, according to investment platform provider AJ Bell.
“Investment banks are generally a good business for employees and a bad one for shareholders (rather like football clubs). Investors tend to attribute a low valuation to them, as they are volatile, cyclical, soak up a lot of regulatory capital and come with high wage bills,” says Russ Mould, AJ Bell Investment Director. “Any fresh moves to boost returns from Barclays’ underperforming investment banking business will therefore be welcome, especially if its balance sheet continues to shrink. A reduced exposure may leave the bank with less potential for growth but it could lower the risks associated with, and improve the predictability of, its overall profits, and therefore prompt a re-evaluation of its shares.”
Notes for Editors
- A spreadsheet outlining all changes in chief executive officer (CEO) for the current FTSE 100 crop since 2000 is available on request.
- Anthony Jenkins took the post of CEO at Barclays on 1 August 2012, when he replaced Bob Diamond.
- Barclays is the twelfth FTSE 100 company to change its CEO, or announce a change at the top, in 2015.
- The others are Admiral, Barratt Developments, BG Group, Centrica, Morrison, Prudential, Rolls-Royce, Smiths Group, Standard Chartered, Standard Life and Whitbread.
- Eight changes are already effective. Barclays has begun the search for a new boss. Andrew Reynolds-Smith takes over at Smiths in September. Alison Brittain takes the helm at Whitbread in January 2016 and David Stevens will replace Henry Engelhardt at Admiral in May 2016.