“At Barclays, stakeholder engagement is key to ensure responsible balanced decisions are made,” runs the corporate blurb in the annual report, describing a well-oiled process whereby the bank fulfils its duties as an upstanding corporate citizen by maintaining “an open and frequent dialogue” with outsiders.
If only. Sometimes only an old-fashioned public drubbing at the hands of MPs, banking campaigners and newspapers is enough to catch the bosses’ attention. So it is with the Post Office affair. Barclays has capitulated. It will now opt back into an industry-wide arrangement that allows customers to use debit cards to withdraw cash at Post Offices.
A U-turn has seemed inevitable from the day Barclays protested about a steep rise in fees under the post-2020 deal and said it would instead set up local shops to process cash withdrawals. The move was an obvious PR own-goal. The fragile Post Office network is a bit like the NHS – if you are seen to kick it, there will be a backlash.
One wonders how Barclays ever thought it could ride out the storm. The annual sum at stake was a mere £11m – peanuts for a bank that distributes £1.6bn in bonuses to its high-earners in an average year. Barclays was also ensuring that every branch closure in future would be resisted more bitterly. There was no upside to the original decision.
As it happens, the bank had one reasonable line in mitigation. By rights, the government should be feeling greater heat for imperilling the viability of rural Post Offices. Its digital-first policy for passport applications, driving licences and suchlike has removed a lot of trade. It’s about time ministers addressed the problem. There was a large dose of hypocrisy in their criticisms of Barclays.
Yet the bank, by being the sole refusenik on cash withdrawals, was picking a hopeless fight. The chief executive, Jes Staley, says “we’ve listened” and, given the volume of complaints, he could hardly fail to hear. But he could also conclude that engagement “dashboards” are useless without common sense.
Good news at last for Woodford investors
Finally, some better news for Woodford investors – or, at least, those in the quoted Patient Capital investment trust. The embattled directors have found a big City firm to assume management duties. Schroders will take over by the end of the year; an appointment that sent the share price up 25%.
At 38p, the shares still sit at a huge discount to the reported worth of the assets, currently 63p. But Schroders’ arrival will give hope that the published valuations are semi-credible. The new manager will only be entitled to performance fees once the net asset value passes 77p, and then only from the end of 2022.
That timetable also suggests the road to recovery will be long. Remember, the trust started life at 100p in 2015 and, if Woodford had kept pace with his aim of 10% annual improvements in asset value, a par score would be roughly 150p by now. Still, a reset under a new manager looks a healthier outcome than the alternative of putting the fund into run-off.
Patient Capital chair Susan Searle’s next act, though, should be her own departure. The board she ran was riddled with conflicts of interest since too many members had close links to Woodford and firms within the portfolio. Well done on hiring Schroders; now it’s time for a new and independent chair.
Never a dull day at RBS
New chief executive Alison Rose will soon take the reins at Royal Bank of Scotland amid great expectations for share buy-backs and returns of capital. Investors, including the government, might be well-advised not to spend the money before it’s arrived.
Another £900m on PPI provisions was poor, but at least it was expected. Rather, the shock was rotten third-quarter numbers from NatWest Markets, the rump of the old investment banking division. That was enough to ruin an otherwise OK-ish trading performance. Nothing is ever straightforward at RBS.
