The words "transparency" and "stakeholders" are big at Barclays these days. But if you ask new-broom chief executive Antony Jenkins how much money the bank was making from tax avoidance schemes in the bad old days, you won't get an answer.
It will cost Barclays £500m next year in lost revenue to get out of activities now deemed socially unacceptable, Jenkins said on Tuesday. But this figure doesn't only include the closure of the structured capital markets division, where the aggressive tax planning took place; it also covers a halt to punting on the price of wheat and other agricultural commodities, plus the abandonment of a couple of small and loosely defined proprietary trading businesses – where the bank risks its own money.
So how much did Barclays make from tax games last year? And, since the £500m is a year-on-year figure, what were the numbers in the go-go years? Jenkins won't answer either question. Barclays has never provided such a breakdown and, new era or not, he doesn't intend to start now.
Parliamentarians on the banking standards commission, such as Lord Lawson, who has alleged "industrial-scale" tax avoidance, will have to step up their demands for information. Knocking politely on Barclays' newly painted front door is not going to work.
Jenkins should not be surprised, therefore, if some "stakeholders" are underwhelmed by his strategic and ethical relaunch. It was a poor start to his reign to be so reluctant to describe, except in broad-brush terms, the bank's past. "Barclays is changing," he declared. Up to a point.
Still, his pledges of "good behaviours" for the future sound sincere enough. On that score, Jenkins is a far more credible figure than Bob Diamond and former chairman Marcus Agius. The open question is whether he has the support of rank and file troops in the investment bank, some of whom may prefer to make money without the distraction of having to "live the values".
From outside, it's impossible to know if Jenkins, a retail banker by background, is viewed on the trading floor of the investment bank as a boss leading overdue reform or a spouter of wishy-washy platitudes. Jenkins probably can't know either. So his policy on bonuses makes sense: from next year, all employees will be assessed in part by how they have contributed to the culture of the organisation. If Jenkins is minded, that could serve as a device to weed out the refuseniks. We shall see.
As for the shape of Barclays, there were few surprises. Barclays has been dominated by investment banking in the past (the division provided 60% of last year's profits), and will continue to be so. More capital will be diverted into mortgages in the UK and "mass affluent" consumers in Europe, where returns are healthy, but it's a softly-softly evolution.
The same is true on bonuses. Last year the Diamond/Agius combination handed out £1.4bn more in bonuses than in dividends to shareholders (£2.1bn versus £700m). Under Jenkins, the gap is down to £1bn (£1.8bn versus £800m), which is a step in the right direction, but hardly represents a radical readjustment for a bank that still isn't earning returns in excess of its cost of equity. Jenkins promises that the magic moment on economic returns will arrive in 2015.
That pledge will satisfy shareholders, who may be relieved to see that the promised "shredding" of Diamond's legacy didn't amount to a revolution. In essence, Jenkins is promising to cut a few costs, jettison activities that caused a stink, and avoid more scandals like PPI, Libor and the misselling of derivatives to small businesses. It's a reasonable strategy. If only he would drop the extreme defensiveness on the tax point, he might generate more goodwill.
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