Page 84 - Bank Case Studies

So now:

“we can turn our full attention” to improving

shareholder returns. Returns on tangible equity will be

above 10 per cent by 2020.” Staley (10)

Moreover, Barclays' non-core risk-weighted assets (RWAs) in

2018 were only £27bn, having been over £75bn at the end

of 2014 bn and 46.6bn by the end of 2015. (7)

Nevertheless, of greatest concern to investors was the

investment bank division’s anaemic profitability. It returned
1.1 percent on equity in 2017, a tenth the level at the U.K.

retail unit and far below the 16.7 percent return generated

by the bank’s international credit card business.

However, strategy seemed to be bearing fruit as the bank

earned fees of $352m in the year 2016/2017 from M&A and

capital markets, giving it a 9.1 per cent market share,

comfortably ahead of JPMorgan’s 7.8 per cent share and

Goldman Sachs’ 6.6 per cent. In 2016, Barclays had a market

share of 6.5 per cent, behind both JPMorgan and Goldman.

Furthermore, Staley sought to impress investors with a

“road map” for achieving better returns, with a focus on its

investment bank, known as its markets business.

This included a new timeframe for achieving higher returns

on tangible equity, moving from 5.1% in 2017 to 9% by 2019

and at least 10% by the following year. (10)