Jes Staley, CEO of Barclays (BCS), says his company’s turnaround efforts are in the “middle innings” and he can see the “end of the game.”
In an interview with Yahoo Finance editor-in-chief Andy Serwer, Staley said the bank has clearly defined where it wants to go and on its way to becoming a transatlantic consumer, corporate, and investment bank anchored in London and New York.
“We want to have a core bank based in [London and New York], but also a presence in Asia and in Europe, which is generating a double-digit return on tangible equity. That’s our goal for the core bank,” said Staley. “We have a non-core bank of businesses we want to get out of … The goal is to wind down that non-core bank over 2016 and into 2017 so we’re left with a profitable core bank which we think is the future of Barclays going forward.”
How Barclays identifies regions to exit
Barclays is exiting Africa and scaling back its retail banking operations. The bank also agreed to sell its wealth and investment management business in Singapore and in Hong Kong to the Bank of Singapore for $320 million.
Staley believes that in order to execute a successful turnaround plan, a firm needs to accurately determine regions where its has a competitive advantage.
“You focus on where you think you have competitive advantages. We have a tier one level investment bank in New York and London with exposure in Asia and elsewhere,” said Staley. “Right now, that industry has got some real structural challenges to it, but we think we have a competitive advantage in that space, so that’s how you build that overall strategy going forward.”
No need to panic! Staley sees strength in the financial sector
Barclays is executing its turnaround plan during a volatile time for the financial industry as concerns about global economic growth, low energy prices, and near-zero interest rates weigh on results. But Staley is positive. While acknowledging it’s a challenging environment for banks, he thinks the sector has recovered “quite significantly” from the crisis of a number of years ago. “I think you see tremendous strength in terms of capital levels and great strength in terms of liquidity,” said Staley. “Once we see a normalization of interest rates, I think it will be a very attractive time for the industry down the road.”
Barclays is scheduled to report its first quarter 2016 results on April 27.