Barclays stock took a bit of dive today as investors mulled over whether hedge fund manager and Wall Street veteran James ‘Jes’ Staley is about to take the top job at the bank.
Barclays will still not comment on Staley’s allegedly imminent appointment but that did nothing to stop the stock falling by nearly 4%. It is now around 2.6% lower at the time of writing this post:
Investors are unsure about the direction Barclays is moving in after a variety of reports, including those from the Wall Street Journal and the Financial Times, that Staley is going to become CEO pending regulator approval.
“I think it’s the conflicting message that Barclays is giving investors,” said Mike van Dulken, head of research at Accendo Markets to Business Insider.
“In 2012, they ousted Bob Diamond because of all the turmoil and he was very pro-investment banking. He was the man who made BarCap (Barclays Capital, the investment banking arm). They brought in Jenkins to ensure more stability and to minimise risk-taking.
“But Staley is very much from the same kind of stable as Diamond. He has the same experience. He’s a hedge fund guy and this shows he has a distinct lack of retail experience. While investment banking is more profitable, and you’d think investors would cheer over the implications of more profit, it does provide more risk for the bank if there is another financial crisis.”
Staley is the opposite of ousted CEO Antony Jenkins. He’s a hedge fund manager at US-based BlueMountain Capital. Two years before that he was the CEO of JPMorgan’s investment banking and asset-management unit.
He oversaw the bank’s “expansion in to alternative investments” and earned huge sums even during the credit crisis, when his bank had to use some of the US government’s temporary bailout funds.
Jenkins was known as the “Mr. Nice” of banking with a background in retail banking.
Staley’s more like the American rock star in the City — Bob Diamond — and it’s freaking some people out because it looks like a rumoured merger between Barclays and another European investment bank could be more plausible.
But some other analysts say that while the Barclays stock is down more than other banking shares, investors need to realise that the whole sector is down overall.
“Barclays’ stock may be over 1% lower than the other banking shares but I’d be wary of pinning the entire fall today on Staley,” Tony Cross, market analyst at Trustnet Direct, told Business Insider.
“Emerging market slowdown is a big concern for the banks, especially Standard Chartered which is down by 2.5%, so this could be adding further pressure to shares.”
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