Barclays to Deliver Justice in the Financial World.  How About That!

[ by Melanie Gretchen and Howard Haykin ]

Barclays CEO Antony Jenkins says he seeks to instill a new level of accountability at Barclays and repair the bank's reputation that was torn asunder during 'scandal-ridden' Robert Diamond era, where employees sought out profits 'by hook or by crook' at the expense of compliance and integrity. 

True to his word, Mr. Jenkins is backing up his powerful, idealistic message with equally powerful actions.  On Wednesday, Mr. Jenkins announced that the bank will recoup the £450 million ($682 million) in Libor manipulation fines it paid out to U.S. and U.K. regulators.  He will accomplish this feat by reducing 2012 year-end bonuses and clawing back some earlier share awards paid to employees. 

This strategy is tremendous in two respects.  First, he gets out his message to employees in the most effective way possible - by hitting their wallets and pocketbooks.  Second, he ensures that Barclays shareholders are not financially burdened by the civil and criminal actions of irresponsible employees. 

In January, Mr. Jenkins paid his share by foregoing a 2012 bonus as the bank struggles to rebuild its reputation.  He followed that action with two more highly publicized steps:

• He issued an ultimatum to his employees:  either buy into the bank's push to rebuild its reputation, or leave the bank.
• He said the bank would release of list of staff persons whose 2012 earnings topped £1 million ($1.5 million). 

It's always better when everyone has "skin in the game."

Beyond making reparations for past misdeeds, Britain’s 2nd-largest  bank also has set its sights on the future.  The bank intends to cut annual expenses by £1.7 billion ($2.6 billion) that will cost about 3,700 employees their jobs.  After all, the bank posted its first full-year loss in 2 decades. 

Lastly, Barclays will set aside reserves to cover the mis-selling of payment-protection insurance and other products.

[C-I Note: Quite an impressive start for Antony Jenkins, Barclays' s newly tenured Chief Executive.  And he did all this and more in just 6 months.  Borrowing a phrase from the Bible, "And in the 7th month, he rested."  While we know Antony Jenkins won't rest on his laurels, but he would certainly deserve to do so.

For further details, go to [Bloomberg, 2/27/13].