Barclays spring-clean is only surface deep

Antony Jenkins does great PR. Barclays’ chief executive has vowed to clean up the bank he leads and make it adopt a new — and cuddlier — set of values, in which staff are judged on their integrity and respect for others.

On Thursday, he completed the Augean stable cleansing of those associated with Bob Diamond, the former chief executive ousted due to Barclays’ fixing of Libor interest rates, by sweeping out Rich Ricci, the head of investment banking.

Mr Diamond was well suited to the role of banking villain par excellence. A brash American who set Barclays’ investment bank on a headlong rush to expansion, and who had the temerity to address MPs by their Christian names when hauled up before Parliament’s Treasury select committee last July, he seemed to many to encapsulate everything that went wrong with our banks.

Ricci has been even more of a gift to banker bashers with his vast salary, his even bigger bonuses, his racehorse called Fatcatinahat — and of course, his own name.

So the temptation to cast Jenkins as the nemesis of his predecessor and all that he stood for is understandable — and one that Jenkins himself has taken full advantage of.

In February, he announced a programme to transform Barclays. The bank would take a new ethical approach; its investment banking ambitions would be retrenched; and the division responsible for helping wealthy people avoid tax would be closed down.

Jenkins’ stated intent to convert his bank into one that espouses ethical business standards and makes profits for investors has helped Barclays’ shares rise 34 per cent over the past year —and has led to him being sometimes referred to as Saint Antony.

But the public — and Barclays investors — should take Jenkins’ pious utterances with a pinch of salt.

For a start, his own record is hardly untainted. Before he became chief executive, Jenkins headed up Barclays’ retail bank and its Barclaycard arm, which mis-sold payment protection insurance partly under his watch. The PPI scandal has, so far, cost Barclays (and thus its shareholders) £2.6 billion.

Second, the idea that he has radically changed the type of senior managers running the bank is false. Ricci may be out, but his job is to be partly filled by Eric Bommensath, head of fixed income and one of Diamond’s original recruits.

Third, Ricci has been excoriated for failing to adhere to the bank’s new, cleaner standards by, earlier this year, immediately selling nearly £18 million of shares awarded in bonuses. But, although Jenkins himself has been lauded for waiving his 2012 bonus, potentially worth £2.75 million, he not only received shares worth £5.6 million under the same scheme, but also sold half the shares immediately.

Finally, the jury is very much still out on what kind of business Barclays will do in the future. Sure, it has closed the structured capital markets division responsible for some of the tax avoidance strategies for which the bank was widely criticised. But it will continue to provide tax planning advice to existing clients and, to make money, will surely have to compete against rivals in the punchiness of that advice.

Despite the rhetoric, Jenkins has reined back Barclays’ investment banking arm far less than many expected. He has cut the equities business in Asia, but has vowed that Barclays will continue to be a “full-service global investment bank”.

Jenkins has certainly done a good job so far in promoting a new image for Barclays, not to mention for himself. But the spring-clean of the Augean stables is, so far, really only surface deep.