What's going on at Barclay's?

First posted 11th February 2014

 In the space of a few hours, several news pieces on the state of Barclays Bank have cropped up, and none have placed them in a particularly good light. Here’s a round-up of their latest escapades, and an attempt to answer the titular question. 

Problem 1: Big, big bonuses. Have't we been here before?

There's an odd belief amongst banks that, because they deal with large amounts of money, their top employees deserve a comparably staggering amount. Despite Barclays' CEO Antony Jenkins assuring the public that Barclays would show "restraint" on bonuses (whatever that meant), this year has seen an even greater amount paid to executives. The figure is expected to top £2 billion.

This is not purely a Barclays problem, of course. Despite many UK banks having been bailed out with tax-payer money, the bonuses paid out since the onset of the financial crisis in '08 will hit £80 billion by the end of 2014.

Which is a ridiculous amount, of course, considering that those receiving these bonuses are already on healthy salaries.

At the very least, Antony Jenkins has refused his bonus this year, so good for him on that end at least. 2014 should be the last year that such bonuses are paid - the EU are pushing through a pay cap on bonuses to 100% of salaries, or 200% if shareholders back the pay-out. We'll have to see if this works or not, RBS have already found a way to give bonuses through 3rd parties that don&'t technically count as a bonus.


Problem 2: massive job cuts, which naturally means even bigger bonuses.

Barclays recently announced job cuts in the thousands. While everyone was rather concerned aboutt his, Barclay came out with the news that an extra 12,000 jobs will be cut in 2014, with 7,000 of those being in the UK. That's astonomical.

In spite of these cuts, bonuses in the investment banking division have actually increased this year,meaning that individual bonuses are even greater than on first glance. Astonishing.

Despite Antony Jenkins'; promises on ethical pay-outs and his nice-guy image after previous CEO Bob Diamond's shameful exit after the Libor scandal, we really have to question whether he's making any real changes in the money culture of Barclays.

Problem 3: profit numbers released a day early, and they aren’t so good.

Barclays surprised analysts today by releasing their figures a day early, after the Financial Times were "too close" in their estimate of the numbers. The adjusted pre-tax profits for 2013 came out at £5.2 billion, which is down by a third when compared to 2012.

The full figures are set to be released Tuesday evening, but at this point in time it’s not looking fantastic for Barclays.

Still looking for that justification for those bonuses, fellas.

Problem 4: 27,000 Barclay's customers have had their data sold on the black market. Nice.

Yes, you read that correctly. On 10th February 2014, as slashed profits were revealed, and ridiculous bonuses announced, Barclays also had to concede that 27,000 files were stolen, containing such delights as customer mortgages, savings, salaries, passport & national insurance numbers, and even psychometric test data, have been bought up. By someone out there.

In a statement, Barclays said:

"Our initial investigations suggest this is isolated to customers linked to our Barclays Financial Planning business which we ceased operating as a service in 2011. Based on what we have seen, this appears to be data from 2008 or earlier.

"Protecting customers’ data is a top priority and we take this issue extremely seriously. This appears to be a criminal action and we will co-operate with the authorities on pursuing the perpetrator."

Not sure how comforting that was supposed to be. Barclays are probably looking at another hefty fine for this security hole.


We're not trying to be unduely cruel to Barclays. Their customer service is undoubtedly solid, and they've never needed a bailout like Lloyds or RBS. Barclays' have just had a terrible week, and it seemed like a good time for an opportunistic jab at an easy target.

So, what is going on at Barclays? Well, in our opinion, pretty much what was going on before the financial crisis. The scandals may be tapering off, but the atmosphere of entitlement is still alive and well.

Hopefully Antony Jenkins can regain hold of the bank and put it back on the right course.


Vincent Kenny