Barclays's McFarlane says 'tough calls' needed to boost returns

Barclays shares have increased about 6.5 per cent this year after dropping 11 per cent in 2014 under Mr Jenkins.
Barclays shares have increased about 6.5 per cent this year after dropping 11 per cent in 2014 under Mr Jenkins.PHOTO: BLOOMBERG

LONDON (BLOOMBERG) - Barclays Plc Chairman John McFarlane told staff in a memo that the company will have to make some "tough calls" in the coming weeks as he seeks to boost returns, according to a person with knowledge of the contents.

The lender must do more for shareholders, Mr McFarlane, 68, wrote in a memo to employees, according the person, who asked not to be identified because the information is private. A spokesman for the bank in London declined to comment.

Mr McFarlane fired Chief Executive Officer Antony Jenkins in July after growing frustrated with the slow pace of restructuring. He has since pledged to step up the pace of his overhaul and press on with cost cuts and disposals to bolster earnings, battered by surging litigation costs. The lender last week sold its Portugal business for about 100 million euros (S$159.7 million) to Spain's Bankinter SA.

Barclays shares have increased about 6.5 per cent this year after dropping 11 per cent in 2014 under Mr Jenkins. That's the best performance this year among Britain's five biggest lenders.

In his latest address to staff, McFarlane said while the bank has made "genuine progress," it needs to focus on driving core earnings growth, cutting bureaucracy and promoting ethical standards, according to the person.

Barclays announced in July it would cut more risk-weighted assets at its non-core unit than previously planned, lowering RWAs to about 20 billion pounds (S$44 billion) by 2017. The bank had previously targeted a reduction to 45 billion pounds by the end of 2016.