Barclays talks up investment bank as showdown with raider looms

Barclays declared its controversial investment bank was beating bigger rivals on Wall Street on Wednesday as it braced for a crunch meeting with activist investor Ed Bramson.

The New York corporate raider wants Barclays to scrap at least some of its trading arm and return cash to beleaguered shareholders.

But Barclays chief executive Jes Staley insists the best way for investors to gain is for the bank to keep chasing deals in London and on Wall Street.

He noted that the bank was involved in the three biggest takeovers this year, Comcast’s bid for Sky, Randgold’s merger with Barrick and Michael Kors’ purchase of Versace, giving the lie to the idea that European banks can’t compete in investment banking.

He said: “Four quarters in a row we have gained market share. The reality of what is happening belies the proposition that we can’t compete. We think the diversification makes the bank safer.”

In the third quarter profits jumped from £1.1 billion a year ago to £1.5 billion. The trading arm saw revenues up from £627 million to £688 million.

A Serious Fraud Office probe hangs over the bank, as does Bramson.

Staley said: “We have only met once with Ed Bramson. We are going to meet him again in a few weeks. He has not yet articulated to the bank what his strategy is. We read the papers. But there has been no real exchange between him and us.”

Barclays is redeeming $2.65 billion (£2 billion) of preference shares, a move that will cut borrowing costs. That move on top of a rising dividend, 6.5p for 2018, means investors should start to see good returns, though the share price remains stubbornly low. It rose 2p to 168p.

Staley said Barclays is “beginning that road of taking excess earnings and returning them to shareholders. Our intention is to continue that.”

Finance director Tushar Morzaria said: “We don’t control the share price. The market controls that. We are continuing to grow our business and gain market share.” Barclays admits Brexit is weighing heavily on clients, but Morzaria was sanguine. He said: “With all of these things people always overreact. It is very rare that people correctly predict a crisis. The more they talk about it the less likelihood there is going to be one.”

Laith Khalaf at Hargreaves Lansdown said: “These latest results don’t really change the big picture at Barclays. Progress has been made, though it’s come in fits and starts.”