Barclays’s Funk: Data Leak and Poor Headline Numbers
The second-largest bank by assets in the United Kingdom, Barclays (NYSE:BCS), reports earnings on Tuesday, and on investors’ minds is the Sunday revelation from Britain’s The Mail that a massive cache of customer data — including details on income, risk appetite, savings, mortgages, health issues, insurance policies, and passport and national insurance numbers — has has been stolen.
For Barclays CEO Anthony Jenkins, who has pushed to implement a “fundamentally different culture” than that created by his predecessor, Bob Diamond, the news was a setback. Upon taking office in August 2012, amid the fallout that followed the bank’s Libor-rigging scandal, Jenkins committed to rebuilding investor and customer trust in the institution, a task he believes could take as long as 10 years.
“It is about what you do, not what you say,” Jenkins told the BBC’s Today radio program in December. “Until people start to perceive the change, Barclays will not begin rebuilding that trust.” He acknowledged that “it’s desperately disappointing to still have these issues being uncovered,” but with Sunday’s news that massive amounts of customer data was stolen, it will be hard for Jenkins to sell the idea that a fundamental change in corporate accountability has begun.
Cleaning up company standards and improving returns has been no easy task. While full-year 2013 results will not be officially reported until Tuesday, the bank released its headline number early on Monday. The bank’s fourth quarter was especially difficult, as investment banking income dropped and Barclays took further charges linked to the cleanup of its business in the wake of the 2008 financial crisis. Full-year profit also missed expectations.