Bombed-out bank shares are a failure of modern capitalism

When I read news of a fresh strategic plan for Barclays, I seem to hear a ghostly rustling from the corner cupboard in the living room. Could it be a forlorn protest from the dusty bundle of share certificates that are the last vestiges of my late father’s lifelong service to Barclays from junior clerk to deputy chairman? They were a modest farewell reward – 40 years ago, in the era before mega-bonuses for senior executives – that might once have been swapped for a country cottage but today would barely yield enough to pay for his upcoming centenary dinner.

Even the Qatari sheikhs have sold down their Barclays holdings in despair. But out of misplaced loyalty and sentiment, our family has hung on, watching the shares languish at less than a quarter of their pre-2008 price and, in recent times, half the bank’s net asset value. So what relief does chief executive C.S. Venkatakrishnan – Venkat for short and successor to the disgraced Jes Staley – have in mind for us, after expensive advice from a new set of consultants rehashing the recommendations of their predecessors?

Greater focus on the retail sector, of which the recent £600 million purchase of Tesco’s banking business is a signal, and on wealth management; concentration on higher-value corporate clients; a drive for better returns from the trading floor and a reallocation of capital away from high-risk investment banking; oh, and another round of cost-cutting. Heard it all before? I’ll say we have, several times over.

Moribund stock-market valuations of banks that ought to be blue-chip building-blocks of every pension fund and small investor’s portfolio – reflecting the failure of those banks to steer a straight and prudent course from one decade to the next – are among the greatest failings of modern capitalism. Hope for Barclays shareholders rests not on a cunning new plan for capital growth but on the promise of higher dividends and, more significantly, large-scale share buybacks.