No sign of a strong reaction to Tuesday’s news that Diamond Bob is to become CEO of Barclays:
Shares in Barclays were moved a bit more by new fears on banks’ holdings of European sovereign debt, plus signs of toughness in Basel III.
But little reaction isn’t surprising, in as much as most people assumed Diamond Bob was running Barclays anyway, after the land grab of recent years.
BarCap now generates around two thirds of group pre-tax profits, against one third for retail. So there really shouldn’t be any concern that Diamond will turn Barclays into BarCap with a bit of retail (in the UK, Spain and African) bolted on the side because that’s already the reality.
Still his appointment is bound to trigger speculation that Diamond Bob will go the whole hog and spilt up Barclays. And perhaps that’s the point.
Perhaps with the timing of this appointment, which surprised the City, Barclays is trying to send a message to the government and the independent committee charged with examining the future “size, scale and function” of the banking sector.
Basically, a message as follows:
“If you decide ‘casino investment banking’ should be separated from retail banks, our new CEO will simply de-merge the business and relist it in New York first. And remember he’s always dreamt of being a big swinging dick on Wall Street”. Imagine the horror in government circles of all those jobs losses.
Now, Diamond has already said that he’ll stay with current strategy. Which sounds like Diamond Bank needs the revenue from its retail side for a while yet, even as the investment bank heads into volatile waters. But the threat is out there.
And this wouldn’t be the first time that Barclays has shown two fingers to the government (the bank didn’t take state support during the credit crisis) or for that matter showed a tin ear to public opinion.
Other banks might be embarrassed by headlines like this.
But seemingly not Barclays.
Related link:
Diamond to be new head of Barclays – FT