Barclays’ financial results today provide a good prompt to look at how the bank is faring, having been rocked by crises over the last year. Profits have plummeted by a staggering 96% and 3,700 jobs are set to be axed. But all’s not as bad as it seems and there’s much we can learn from the company’s latest actions.
I last wrote about Barclays and crisis communications in July, when its Libor rate-riging scandal broke. The bank had done wrong, was in trouble and not handling it well. Things only got worse after that and the board ejected chief exec Bob Diamond.
I’m certainly not saying today’s dramatic figures are all a direct result of the reputational fall-out from Barclays’ crises. Much of the plunge in profits stems from the costs of its misdemeanours themselves: a £290 million fine for Libor-rigging and over £2 billion set aside to cover mis-selling, on top of more than £4 billion in losses from revaluation of its own debt.
But it is striking how prominently reputational damage has featured in Barclays’ commentary about its results and the industry’s reaction, underlining the serious business impact this typically has.
New chief exec Antony Jenkins admitted this morning that “It will take years before people change their impression of us.” And a great deal of media and analyst comment has dwelt on what it will take for the 277 year old company to rebuild trust.
That said, Jenkins does appear to be taking the bull by the horns in striving to restore faith in the brand – in ways from which any organisation could learn. He’s given highly credible comment today, confidently declaring himself undaunted by the task of establishing a “new era” for the company.
He’s outlined tangible measures – including bonus cuts and structural changes – asking the world to “judge us by our actions not our words.” He’s unswervingly acknowledged the organisation’s past failings, including his share of responsibility – a crucial move in any attempt to regain trust.
And he’s shown himself highly accomplished in delivering convincing media interviews, focusing his comments around a small number of simple messages relating to positive change and his mission to “Build a better Barclays.”
Given this, despite the headlines, today’s news has been far from all bad for the bank. Its financial results, though seemingly bleak, were much in line with market expectations and reflect the costs of its promise to mend its ways. Its shares have risen to an almost two-year high.
Perhaps the clearest sign of all that Jenkins may be starting to turn the bank’s reputation around lies in the way analysts are already talking of the recent crises as “legacy issues.” Some have even said the new boss “looks to have done enough” to address them.
For now at least. The long-term picture in such situations always remains to be seen.
What do you think of how Barclays is handling the fall-out from its crises?
