Barclays Plc plans to hire Boston Consulting Group to carry out a strategy review of the lender’s operations, in a bid to help boost a longstanding weak share price.
(Bloomberg) — Barclays Plc plans to hire Boston Consulting Group to carry out a strategy review of the lender’s operations, in a bid to help boost a longstanding weak share price.
The mandate, which is extensive and will cover all the bank’s units, will cost Barclays north of £10 million ($12.4 million), a person familiar with the matter said, who asked not to be identified discussing private business matters.
Among the areas that could be examined are the level of risk-weighted assets in the investment bank as well as how to best position the wealth and retail businesses, another person familiar with the matter said. It’s unclear what the scope of potential recommendations from the review may be.
“As you would expect, we frequently work with various external consultants,” a spokesperson for Barclays said. “Our businesses continue to perform well, and our business mix is robust. Engaging consultants is part of the normal course.”
A spokesperson for BCG declined to comment.
The project comes as Chief Executive Officer C.S. Venkatakrishnan hits 18 months in the role, although he spent several months of that time undergoing cancer treatment. Barclays is coming off the most profitable two-year stretch in its history, but its share price has lagged, with the firm’s market value still half its 2007 peak.
“We are very conscious that shareholder returns have been disappointing for much of the last decade,” Chairman Nigel Higgins said in response to an investor at the bank’s annual general meeting in London this month. Higgins stressed Barclays’ commitment to increasing its dividend and use surplus capital to buy back shares.
Barclays comprises one of the UK’s largest retail banks as well as an international credit card business and a global investment bank. Its price-to-book value remains marooned below 50%, lagging other listed UK lenders, according to data compiled by Bloomberg Intelligence.
Venkatakrishnan has worked at Barclays since 2016, as its chief risk officer and then as head of its global markets business. He has previously said that he isn’t planning any significant shift from the bank’s strategy of maintaining a sizable investment bank.
“The investment bank has been what has kept Barclays flourishing and quite apart from many of our competitors,” he said in October.
Banks regularly engage strategy consultants like BCG and McKinsey to benchmark against peers, review capital allocations within the firm and evaluate M&A opportunities as well as client engagement and costs.
–With assistance from Harry Wilson.
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