Lloyds and Barclays are looking to change their strategies — at the worst possible time, writes Elisa Martinuzzi
Plans for a change of leadership at two of Britain’s major banks could hardly be better timed. The economic shock of the pandemic, plus the uncertainty around Brexit, will probably demand a strategic re-set at both Lloyds Banking Group and Barclays.rio will step down in 2021 once a successor is found. While Barclays says no search is underway, the lender could seek a replacement for CEO Jes Staley as soon as next year and recently reached out to potential candidates, Bloomberg News reported.
In February, Barclays said Staley was being investigated by the UK regulator over how he characterised his relationship with deceased financier and sex offender Jeffrey Epstein. The board unanimously backed him after concluding Staley had been sufficiently transparent with the company. The approach has rightly attracted opposition. Activist Edward Bramson has been pushing for a retreat from trading given its relatively poor returns. Barclays’s UK commercial lending business posted a return on tangible equity of about 18% last year, compared with 8% at the investment bank. At the group level,True, a trading surge in the first quarter of 2020 helped the securities unit post better returns than the UK business, which had to book provisions for loan losses.
In the meantime, a further pruning of UK retail branches and improving cross-selling in the consumer bank look like sensible and available options. All told, that could be enough to re-energise the strategy.rio is one of the longest-serving CEOs in European banking of his time. Having exited state ownership by repairing the balance sheet and becoming more efficient Lloyds is now wrestling with a margin squeeze in the cut-throat home-loans market.
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