Stake: Activist investor Edward Bramson
Activist investor Edward Bramson will finally come face to face with Barclays chief Jes Staley this week, amid City fears that the hedge fund boss wants the bank to restructure its investment banking arm.
It is thought that Bramson’s firm, Sherborne Investors – which took a 5.2 per cent stake in Barclays earlier this year – wants the bank to shut its fixed income, currency and commodities (FICC) division. In the boom years this was home to high-earning bond and foreign exchange traders.
The long-awaited meeting will see Bramson lay his cards on the table. He has not said anything in public about his Barclays wager, and prefers to work behind the scenes to add value to businesses.
Banks must set aside huge amounts of capital for FICC operations and it is thought Bramson believes the returns are not worth the outlay.
He targets investments where he thinks he can double the share price. Bank insiders doubt he can achieve that.
Sources say Barclays also needs to maintain its FICC arm to attract and keep big corporate clients who want the services it offers. If it were unable to offer debt services, for instance, the bank might miss out on lucrative mergers and acquisitions mandates.
Insiders say too that even speculation over the future of the investment bank is harmful as it can cause an exodus of clients and talented staff.
Ian Cheshire, chairman of Barclays’ retail bank, said at last week’s annual meeting the company had contacted its top 20 shareholders and believes they are supportive of the current strategy.