City firms come and go but Rothschild is forever. The merchant bank has already gifted France its president in the shape of Emmanuel Macron, a protégé of recent chairman David de Rothschild. Now it is to supply the next chair of Barclays in veteran dealmaker Nigel Higgins. The choice of Higgins should be a support
City firms come and go but Rothschild is forever. The merchant bank has already gifted France its president in the shape of Emmanuel Macron, a protégé of recent chairman David de Rothschild.
Now it is to supply the next chair of Barclays in veteran dealmaker Nigel Higgins.
The choice of Higgins should be a support to chief executive Jes Staley as he battles to preserve Barclays’s credentials as Europe’s leading investment bank in the face of unwanted attentions from activist investor Ed Bramson of Sherborne.
Support: Nigel Higgins should be a support to Barclays’ chief executive Jes Staley (pictured)
One trusts the choice of a City grandee will turn out a little better than the last chairman from the Square Mile, Marcus Agius, who honourably stepped down after the Libor fixing scandal.
There is no escaping the fact that although the latest departing chairman John McFarlane has steadied the ship, extravagant promises to triple the share price never materialised. The bank’s progress has been challenged by its past including the US sub-prime mortgage fines and the shadow of the Middle East fund raising a decade ago.
Criminal charges have been dropped against the bank, but former bosses including patrician chief executive John Varley still face trial.
Staley’s focus on strengthening the investment bank was reinforced by a robust third quarter, demonstrating the bank is still a force in the debt markets where it has long had expertise. It also has been involved in some of the most high profile M&A, including advice to Sky during the bid battle between Comcast and 21st Century Fox.
The Lehman inheritance in the US means it has a much bigger footprint on Wall Street and beyond than European counterparts Deutsche Bank and Credit Suisse.
Pulling back Barclays from this field of play, leaving British and global clients with little choice but the big American houses, would be a mistake as the City braces for the post-Brexit era.
Admittedly Bramson delivered for his investors at Electra and F&C. There is no disputing that with Barclays shares selling at a 30 per cent discount to book value, there is still much repair work to be done. Barclays needs to be more than just another utility bank such as Lloyds and RBS.
It is a great pity that Sherborne’s City backers, which include Aviva Investors, Columbia Threadneedle and Fidelity Worldwide Investors, continue to back Bramson rather than a 300-year-old bank with a name that still carries weight globally. With Higgins in place Sherborne’s august crew of backers should tell Bramson to sling his hook.
Goldman Sachs is another investment bank that has conquered the world, counting among its alumni governor of the Bank of England, Mark Carney, European Central Bank president, Mario Draghi, and US Treasury Secretary Stephen Mnuchin.
But Goldman’s efforts to clean up its culture post financial crisis, first under Lloyd Blankfein and now under new dance-music loving chairman David Solomon, have hit trouble. The decision by US prosecutors to launch criminal charges against two former Goldman Sachs bankers and Malaysian financier Low Taek Jho is a reputational blow.
Goldman’s former Asia partner Tim Leissner has pleaded guilty to conspiracy to launder money and to violate the Foreign Corrupt Practices, and forfeited $43.7m. Colleague Roger Ng has been arrested in Malaysia and extradition is being sought. The co-head of Asia investment banking Andrea Vella has been suspended.
Goldman collected $600m in fees for its work in three bond offerings for the Malaysian entity 1MDB which raised $6.5 billion in 2012 and 2013. Some of the money ended up in Van Gogh paintings, Beverly Hills properties and, fittingly, the movie The Wolf Of Wall Street. Until now the Malaysian scandal has been under the radar largely because it was in a country where corruption is not unknown.
Now the Feds are involved no one can be sure how bloody it may get.
It hasn’t been a great week for the digital giants. Facebook disappointed investors with sub-octane growth. Google staff went on strike over the alleged failure to deal with sexual harassment.
And Apple fans look to be less than delighted with surging prices for new devices. Closer to home Philip Hammond is breaking ranks with the EU by devising a UK digital tax.
The tech rally is fizzling with the stock market values of the eight biggest firms down 21 per cent or $900 billion since September. Yikes.