Barclays Sticking to its Strategy After Last Year’s Upheaval

(Bloomberg) --

Barclays Plc is sticking to a strategy that keeps Chief Executive Officer Jes Staley in charge of its closely scrutinized investment bank after a tumultuous 12 months.

Staley has “a more direct line of sight” into the unit with three senior bankers on the executive committee, he said in an interview with Bloomberg TV. He took direct control of that business following Tim Throsby’s departure and has been seeking to cut costs in a bid to better compete with Wall Street peers.

“I think we’ll keep the organizational structure that we have for now,” he said at the World Economic Forum in Davos, Switzerland.

Despite months of persistent pressure from the activist investor Edward Bramson, the British bank’s overall direction “is pretty well set -- people buy into it, the shareholders buy into it, our performance is demonstrating the wisdom of that universal bank strategy,” he said.

The CEO also expects little movement across the European banking landscape. “Every major bank is in a technology arms race” rather than focused on mergers, he said. “I’ve lived through two of them -- they’re really tough, and most often they destroy more value than they create.”

After attending the business leaders’ dinner with U.S. President Donald Trump on Tuesday, Staley said corporations were broadly optimistic on economic growth for the next couple of years. “It may be slow, or slower, in places like China and Germany, but there’s economic growth out there so there’s reason to invest and there’s reason to be more optimistic than businesses were last year.”

Still, Staley said that any interest rate shocks would be felt in the currently plentiful credit supply.

“When you have zero interest rates, almost by definition you are going to have asset bubbles,” he said. “You want to ride that wave while it’s happening but you want to keep your eyes wide open when there is a correction.”

--With assistance from Sonali Basak.

To contact the reporters on this story: Stefania Spezzati in London at sspezzati@bloomberg.net;Francine Lacqua in London at flacqua@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Marion Dakers

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