Tag: risks

Exclusive: Barclays eyes smaller units for growth in strategic review, risks investor ire

  • Executives study allocating more capital to high-potential units
  • Some shareholders, analysts would prefer stock buybacks
  • Barclays shares down around 3.5% year-to-date
  • Some investors question bank’s overall business mix

LONDON, July 13 (Reuters) – Barclays (BARC.L) is betting it can revive its wilting share price by upping investment in a crop of its smaller businesses including U.S. credit cards, sources familiar with the matter said. But some of its top shareholders would prefer the quicker fix of a buyback.

Chief Executive C.S. Venkatakrishnan is studying plans to allocate more capital to the bank’s wealth management, U.S. credit card and global payments activities to boost returns, according to people familiar with his thinking and reported here for the first time, after drafting in Boston Consulting Group (BCG) to review strategy earlier this year.

A team of BCG consultants has taken up temporary residence at the bank’s headquarters in London’s Canary Wharf financial hub to help management brainstorm an optimal investment plan, one source familiar with the BCG review said.

The lender is pursuing an in-house review as well, the source added.

Another source inside Barclays’ investment bank, talking anonymously because they are not authorised to speak to the media, said lower staff attrition at its technology and back office operations had started to worry cost-conscious managers.

The BCG review could lead to layoffs, the source familiar with the review said, although no decisions have been made.

“As you would expect, we frequently work with various external consultants,” a Barclays spokesperson said.

A spokesperson for BCG declined to comment.

Some top Barclays investors, however, told Reuters they would have misgivings about a plan to prioritise investment over capital distributions.

They question the logic of pumping more capital into divisions that are small relative to their competitors as the global economy shivers and the

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