Barclays’ chair defends ‘unsatisfactory’ share price at testy AGM

Barclays’ chair Nigel Higgins defended the financial institution’s persistently poor inventory market efficiency at its annual assembly, telling disenchanted shareholders the board believed that boosting capital returns and avoiding a repeat of latest expensive scandals would enhance its valuation.

On Wednesday at the lender’s AGM in Westminster in London, Higgins acknowledged that the present share price represented a “clearly unsatisfactory 50 per cent discount to our book value”, however maintained the financial institution had the best technique to succeed.

Barclays’ inventory has steadily declined because it launched into a drive to develop its funding financial institution underneath former chief govt Jes Staley, a technique continued underneath his successor, CS Venkatakrishnan. Since December 2015, when Staley began at the financial institution, the shares have dropped 43 per cent from greater than £2 to £1.52, considerably underperforming Wall Street rivals.

“I would like to address the elephant in the room . . . It is embarrassing to see Barclays hovering between 150p and 170p and in a downward decline all the time,” stated one particular person investor. “I am not going to harp on like a peasant wanting money. But promises have been made to shareholders for decades now . . . If you don’t address the dividend Barclays will always be a £1 to £2 share.”

“You’ve hit the nail on the head,” Higgins replied. “We are very conscious [the share price] has been disappointing for most of the past decade . . . But we are absolutely focused on improving the share price and capital returns.”

Higgins argued {that a} 27 per cent increase in internet revenue within the first quarter confirmed optimistic momentum and that the financial institution had raised its dividend to 7.25p and purchased again £1bn of shares at a reduction final yr.

He added that it was “particularly important given the shrinking European investment banking world, we must ensure that you, our shareholders properly understand how we as a business make money and why our model and strategy is the right one for the bank”.

Another small shareholder requested if the financial institution may enhance its valuation by shifting its domicile and itemizing to New York, following a wave of corporations abandoning London after Brexit and due to extra onerous inventory market guidelines.

“This is a British bank, we’ve been here for 300 years, and our objective is to deal with the valuation question in other ways,” Higgins stated, ruling it out.

For a lot of the remainder of the AGM, Higgins fielded a spread of questions from local weather activists criticising its insurance policies on fossil gasoline financing.

The begin of the assembly was delayed by 25 minutes by chanting protesters. One group of ladies sang about ending fossil gasoline financing to the tune of the Spice Girls’ 1998 hit, “Stop (Right Now)”.

Others stood on their chairs periodically throughout the assembly, riffing on a soliloquy from Hamlet: “Don’t shuffle us off this mortal coil, Barclays keep it in the soil”. An more and more pissed off Higgins replied, “we would like to shuffle you off out of here . . . enough is enough”.

More than 30 safety employees patrolled the room, escorting or finishing up the handfuls of activists who disrupted the assembly. In typically tense exchanges between protesters and board members, one individual accused Higgins of “arrogance and hubris” for his feedback.

Ahead of the assembly, proxy advisers had criticised the board. Glass Lewis said executives didn’t take sufficient of successful on pay after a buying and selling error led to the financial institution improperly promoting $17.7bn of structured monetary merchandise. That scandal resulted in additional than £700mn in settlement and compensation prices, denting annual revenue.

ISS stated shareholders ought to use the annual assembly to question the board over its help of Staley, who administrators continued to again earlier than his resignation in November 2021 regardless of revelations about his shut friendship with deceased intercourse offender Jeffrey Epstein.

Staley resigned amid a UK regulatory probe into how he characterised his previous relationship with Epstein.

However, the topic was not addressed by shareholders.

The outcomes of shareholder votes on resolutions and director re-elections might be launched in a while Wednesday.