Barclays investors fume as Bramson agitates again

Lucy Burton
·2-min read
Ed Bramson 
Ed Bramson

Corporate raider Ed Bramson has stepped up his campaign to shrink Barclays' investment bank - sparking fury from shareholders cheered by the division's bumper performance during the coronavirus pandemic.

Mr Bramson said the lender must consider drastic cuts to boost its share price, and called for it to follow in the footsteps of Germany's Deutsche Bank by focusing on retail operations instead.

But the demands infuriated major Barclays backers. The investment banking arm was boosted by a surge in trading volumes over the past few months when markets crashed worldwide, helping prop up profits as the lender set aside £1.9bn to cover soured loans in other parts of its business.

In a letter to his financial backers, Mr Bramson said:  "In the real world, investors continually show that they just do not care very much about the trading business.

"If Barclays sincerely intends to prioritise shareholder value, this is something that - like Deutsche Bank - it will need to understand."

Mr Bramson - whose firm Sherborne Investors is the biggest shareholder in Barclays with a 5.9pc stake - said in his letter that the coronavirus had significantly distorted banking results.

He argued that Barclays is chasing "unrealistic ambitions" and boss Jes Staley should give up his desire to compete with the largest players on Wall Street.

The secretive financier said Barclays shares have continued to underperform Deutsche Bank, proving that cuts in investment banking pays off. Deutsche is in the middle of slashing 18,000 jobs following years of poor peformance.

He said: "We would all be a lot better off now if Barclays had been the one doing the proving." 

Barclays' major investors have largely been against the activist's campaign. On Tuesday, one said his plan is "beyond irrelevant" in the face of the Covid crisis. 

Mr Bramson's efforts to get himself appointed to the board of Barclays flopped spectacularly last year when he was supported by other shareholders controlling just 4pc of the stock in a crunch vote.

The activist later pledged to ease off so that new chairman Nigel Higgins had some space to tackle the challenges at Barclays. 

But he renewed the campaign this February when UK regulators launched an investigation into Mr Staley's links with notorious paedophile Jeffrey Epstein, who was a key client when the banker worked at JP Morgan. The investigation is continuing.   

A spokesman for Barclays declined to comment.