The bank's past problems are unwinding as it attempts to get clarity on Edward Bramson's demands
On the eve of Barclays results, the elephant in the room decided to trumpet.
Activist investor Ed Bramson, who is advocating a shake up, upped his stake in the bank that he has built up through his investment vehicle, Sherborne.
It was only by a bit, from 5.16 per cent to 5.41 per cent, but people like him don’t have to do much to get the markets and media saying “ooh look at that” and Mr Bramson was thus being talked about as much as the bank’s first quarter results when they were released.
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They showed a loss, partly because of still more payment protection insurance compensation provisions, partly because of the $2bn (£1.2bn)cost of settling a mortgage mis-selling case in the US dating back to pre financial crisis days.
The latter was a win for the bank, which stared down US watchdogs and came to a compromise that left Barclays far happier than some of its rivals. The former issue is due to end in June 2019 thanks to the Financial Conduct Authority’s cut off.
If you strip out their impact, the bank more than doubled its first quarter profits to £1.2bn. It looks to be in a better place than some of its rivals, notwithstanding the backdrop of choppy waters created by Brexit.
Earnings were in line, or slightly better, than most analysts’ forecasts, with the investment bank, the part of the institution that Mr Bramson apparently wants to attack with his scalpel, a notable strong point.
Barclays doesn’t know that for certain because it still hasn’t yet managed to secure a meeting with its restive investor. That will come over the next few weeks. Oh to be a fly on the wall.
CEO Jes Staley has set out his stall to create a transatlantic retail, commercial and investment bank. You can debate the relative merits of that but the future for Barclays is at least somewhat clearer and easier to understand than it has been for several years if it can steer clear of the sort of pitfalls that disfigured these latest results.
Mr Staley also has to steer clear of personal problems So no more attempts to unmask whistleblowers.
He deserves every bit of the criticism he has taken over that, and more, but the affair, which will wrap up with a fine from the Financial Conduct Authority and some loss of bonus, doesn’t appear to have shaken his position with those that count: His investors.
Indeed, his ability to come through it suggests that he’s in a stronger position than might appear.
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Activists like Mr Bramson aren’t interested in the things shareholders ought to get active over; corporate governance, business ethics, executive pay. They are interested in corporate re-engineering with a view to juicing the short term share price in a target company before walking away and moving on to something else.
Mr Staley will have to make his case to the other, mostly somnolent, institutions on his shareholder register if he wants to see him off.
But it appears he has the clout with them to face down his opponent if he has the appetite to do so.