Activist Bramson keeps up pressure on Barclays
By Sean Farrell
Date: Thursday 06 Aug 2020
(Sharecast News) - Activist investor Edward Bramson has called for Barclays to shrink its investment bank by almost a quarter as he continues to agitate for change at the company.
The FTSE 100 lender should consider cutting its corporate and investment bank assets by 24%, Bramson said in a letter to investors seen by Bloomberg. Bramson, Barclays biggest investor with about 5.9%, has not put a figure on his demands for shrinkage before.
Bramson said Barclays should emulate cuts made by Deutsche Bank to improve profitability, the letter said. Germany's biggest bank has shut trading desks and cut thousands of jobs to pare back its once grandiose ambitions in investment banking.
"Trading firms should optimise the capital allocated to their corporate and investment banks rather than pursue unrealistic ambitions," Bramson wrote, according to Bloomberg.
Bramson revealed a stake in Barclays in March 2018 and began pushing for a retreat from the company's "universal bank" strategy that combines retail lending with volatile, expensive trading activities.
Barclays has largely shunned Bramson's demands and refused to give him a place on its board. He withdrew a resolution calling for Chief Executive Jes Staley's removal at May's annual meeting on the grounds that markets were too volatile during the Covid-19 crisis.
Barclays has pointed out that fixed its fixed income, currencies and commodities division's income rose 60% in the second quarter to £1.4bn, cushioning the bank against rising bad debts with the economy in a deep recession.
Bramson wrote that Barclays Chairman Nigel Higgins had admitted the bank had a "serious shareholder value problem". The New York-based investor said Deutsche's actions were an "expedient roadmap" for Higgins.
Investors voted in large numbers for Staley to stay but after he was fined by the UK regulator for trying to unmask a whistleblower and his professional relationship with Jeffrey Epstein came in for scrutiny many investors expect Higgins to find a replacement.
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