Barclays activist is running out of time in board bid

AN activist investor is locked in a race against time to convince Barclays’ investors that he should be given a seat on the bank’s board.

Edward Bramson, who is stalking the banking giant through his firm Sherborne Investors, has so far failed to produce a detailed plan to win shareholder support ahead of the Barclays’ annual meeting next month.

Voting on his proposal started more than two weeks ago. He now has until the end of this month to convince 75 per cent of shareholders to back his plan.

Bramson raised money from investors to buy a 5.5 per cent stake in Barclays before his approach a year ago. But he is still working on a fully detailed proposal on how he intends to fix the bank.

Sources have told The Mail on Sunday the delay is partly due to the complexity of banking regulations, which make it difficult to cut costs while meeting stringent demands from watchdogs.

Shareholders have until April 30 to vote on whether Bramson should be a director, which would give him influence over the bank’s strategy.

The results will be announced at the shareholder meeting on May 2.

It is thought Bramson could make a public statement to shareholders as soon as this week.

The proposal is expected to focus on his plan for the investment bank division. But it is understood that he also has ideas for other parts of Barclays. He has been meeting some of the bank’s largest shareholders in private.

It is thought Bramson could muster 15 per cent of shareholders to vote for his proposal.

This would be a significant revolt against Barclays’ management but far short of the support he needs to secure a seat at the table.

Analysts have pointed to Barclays’ US- dominant shareholder register as a point in favour of Bramson, who is based in New York. Sixty per cent of Barclays’ shareholders are based in the US, with 11 per cent in the UK and 8.6 per cent in Qatar.

City insiders said US investors were less likely to hold a sentimental attachment to Barclays’ investment bank, which has a long-held ambition to become a ‘universal bank’ – dominant in both investment and retail banking, on both sides of the Atlantic.

Bramson’s main pitch has been to US funds such as Dodge and Cox, which has a 3.7 per cent stake in Barclays, and Capital Group, which holds a 6 per cent stake.

Barclays previously considered reducing its reliance on its investment bank.

But he was ousted in 2015 for trying to shrink the investment banking arm and switch the focus more firmly towards retail banking.

Investment banker Jes Staley, who spent more than 30 years at JP Morgan, was then appointed CEO to hone the investment bank. He has recently defended its status as an important institution in British finance.

He has reduced its operating expenses by around 7 per cent since 2015. But the division is still regarded as inefficient. Its costs hoover up 75 per cent of its income, making it the most inefficient division in Barclays.

Such figures provide ammunition for Bramson, who is unlikely to walk away from his campaign even if he loses the vote on May 2.

Barclays and Sherborne declined to comment.

Details from Sherborne’s prospectus demonstrate how Barclays differs from Bramson’s previous investments, in part due to the external pressures on the bank.

On launching its fund, Sherborne said the average target share price rise after 12 months represented 78 per cent of the total eventual change in price of the investment.

Since Sherborne bought shares last year, Barclays’ share price has fallen 26 per cent, in some part due to fears of a No Deal Brexit.