30th August 2012
With news today that Barclays (BARC) has appointed Antony Jenkins as its new chief executive, replacing Bob Diamond, who was forced out by the Libor rate fixing scandal last month, here's what the web made of Jenkins appointment:
Brand Barclays: An uphill battle…
The Wall Street Journal thinks Mr. Jenkins will have to pursue a difficult balancing act: appeasing regulators who feel that Barclays's investment bank was out of control, all while reassuring investors that the company's largest revenue generator won't be paired down too dramatically.
Furthermore, the Telegraph says Jenkins has an uphill battle to restore the bank's reputation. "On the day of his appointment, Barclays shares were trading down as investors were reacted to news that the Serious Fraud Office was investigating the bank over payments made to Qatar's sovereign wealth fund four years ago."
…or already on the mend
But despite the impression of an impossible job, Damien Reece believes much of the hard work has already been done. "The bank's balance sheet has been repaired and much of the regulatory changes at least agreed, if not implemented. There is even a chance of economic recovery within the next three years providing Jenkins with the prospect of a fair wind, something none of his predecessors in the sector have enjoyed for many years."
For his part, Mr Jenkins said he would seek to repair the bank's tarnished image: "We have made serious mistakes in recent years and clearly failed to keep pace with stakeholders' expectations.
"We have an obligation to all of those stakeholders – customers, clients, shareholders, colleagues and broader society – and a unique opportunity to restore Barclays' reputation by making it the "go to" bank in all of our chosen markets. hat journey will take time, we have much to do, and I look forward to getting started immediately."
What about their share price?
So even with this new appointment, does the bank's shares still look attractive? According to Nick Paler, Shore Capital, which has the bank as a 'hold', said now is not the time to be shorting the bank, despite the headwinds it faces, but it has retained its hold stance. "Shore Capital notes that given the current valuation – shares are at 184p, around 30% lower than their peak earlier this year of 256.8p – the bank still looks attractive."
Paler concludes, however, that investors may be cautious of snapping up more shares at this level, with more stiff regulation of all banks still on the cards, and fears remaining over the economy.
Previously on The Financialist:
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