Barclays bankers focused on revenue at expense of clients: Salz's report
Scathing review finds linking pay to revenues encouraged product mis-selling
Barclays, Britain's second-largest lender by assets, paid investment bankers bonuses "incapable of justification" as employees focused on revenue at the expense of clients, according to an internal report.
In the report, commissioned by the bank after it was fined £290 million (HK$3.4 billion) in June for manipulating Libor, Rothschild vice-chairman Anthony Salz criticised Barclays for failings in its culture.
In parts of the firm, there was "a sense that senior management did not want to hear bad news", which "contributed to a reluctance to escalate issues of concern", Salz wrote.
"Pay contributed significantly to a sense among a few that they were somehow unaffected by the ordinary rules," said the 236-page report, published yesterday.
"A few investment bankers seemed to lose a sense of proportion and humility."
Antony Jenkins, who replaced Robert Diamond as chief executive in August, is seeking to rein in pay and boost profits for shareholders to help restore investor confidence in the wake of the scandal over the fixing of the London interbank offered rate. The London-based bank plans to eliminate 3,700 jobs this year after losing £1.7 billion last year.
"We concluded that the reputational problems for Barclays stem in part from the perception that, at least in the UK, some bankers have appeared oblivious to reality," the report said.
