Bob Diamond says Barclays should be ‘radical’ on investment bank amid calls to ditch division
Former Barclays chief executive Bob Diamond has called on the lender to be “radical” with its investment bank by either putting more money into the business or selling it.
Many investors have urged Barclays to ditch its global investment bank, which is relatively small compared to the dominant Wall Street firms, and focus more on retail operations.
“They need to be radical – either invest in it or exit,” Diamond told news and data service GlobalCapital.
The investment arm includes part of Lehman Brothers, which Diamond snapped up when it collapsed during the financial crisis.
Although current chief CS Venkatakrishnan has promised to retain the investment arm, Barclays was reported in November to have been exploring a plan to drop thousands of clients.
Venkatakrishnan is due to provide an investor update in February, which will reveal more details about a major cost-cutting strategy, which could reportedly involve as many as 2,000 layoffs.
Some 1,350 roles were already put on the chopping block in 2023, according to employee trade union Unite.
Diamond added that Britain’s banks had generally “become smaller, less productive, with lower returns, and they pay less tax” under harsh government regulation.
He revealed that his private equity firm, Atlas Merchant Capital (AMC), had offered to take the troubled high street lender Metro Bank private in 2020 but was turned down.
AMC instead took a stake in Metro’s bonds and voted on its latest refinancing package, which is designed to shore up the bank’s weak balance sheet.
Barclays shares fell last month after Qatar’s sovereign wealth fund, the bank’s second largest shareholder, cut its stake in the bank by half.
The bank’s share price has halved since the Qatar Investment Authority first took a £4bn stake in 2008.