Barclays chief executive Jes Staley on Thursday pledged to slash banker bonuses if profits don’t improve in what was a tricky quarter for investment banks across London and New York.
While Barclays was able to increase investment banking market share for the sixth quarter running, Staley admitted to a “lightness” in revenues and said bankers would pay the price.
“That is how a bank should be run,” said Staley.
Although revenues at the equities trading arm were down, the fixed-income business did well.
The investment bank that activist investor Ed Bramson wants to shackle saw revenues in the first quarter down 6%. On average, Wall Street banks saw revenues fall 14% in the same period.
Staley said Bramson is simply wrong to argue that Barclays is “structurally disadvantaged against the US banks”.
Barclays made a profit of just over £1 billion compared with a loss of £764 million last time. Revenues of £5.3 billion were a bit lower than City expectations. The shares fell 2.5p to 164p.
Bramson thinks the investment bank is “a black box with too much leverage”, but it is far from clear that he has the support of ordinary Barclays investors.
Staley has now taken closer control of the investment bank after reportedly clashing with Tim Throsby, the chief executive of Barclays International. Throsby left last month in what Staley described as a “delayering” of the management structure.
Barclays declined to put a cost on the time spent dealing with the Bramson intervention and said it had no idea if he or his representatives will speak at next week’s annual meeting.
Ian Gordon at Investec was broadly supportive of the results, noting impairments on bad loans remain low and advising his clients to buy the shares.
Nicholas Hyett at Hargreaves Lansdown said: “A poor result from the investment bank isn’t a great surprise.
“International rivals have flagged pretty tough conditions across the market… but despite a better-than-expected result in fixed-income trading, today’s numbers will do little to take the pressure from activist Edward Bramson off the board.”