Libor is still corrosive at Barclays

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Libor is still corrosive at Barclays

At Barclays' AGM on Thursday, chairman David Walker was the fall guy. He had to defend pay at the bank, describing 2013’s compensation decision as “among the hardest that we have had to take”, and making it clear that this was thanks to the media.

“Bonuses up, profits down. Not a headline we would have chosen,” he said.

But the continued public interest in pay at Barclays means a fight on pay will be a feature of every future AGM. Even if the third, or fourth or fifth project to regenerate Barclays ends up with booming profits at the investment bank, the compensation Barclays gives its investment bankers will remain a political football.

Shareholders should take an interest in costs, but talking to management about their concerns might work better than dripping poison to journalists at off-the-record briefings.

Besides large sums of money, the other things Barclays needs to attract and retain talent are a clear plan and the confidence to follow it through. The new strategy day, in two weeks' time, may well be the Final Plan that makes the difference, but the constant public sniping at Barclays cannot do much to inspire prospective hires.

When Walker defended compensation on Thursday, he did so in purely negative terms. US banks, he said, paid 15% more, while resignations doubled in the US investment bank. Not a mention of investing in the business, seizing opportunities and expansion.

For this unhappy situation, the bank can thank Libor. Not so much its role in fixing it. More international banks are under investigation than are in the clear. But Barclays, by settling first, became the international poster child for the Libor scandal, and attracted the most public opprobrium. It has become a symbol, to its host regulator, government, and public, of everything wrong with investment banking.

For the business, that means it is still trying to stay in the ring with JP Morgan, but dealing with a corrosive public relations problem on a par with RBS.

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