Barclays: the Quaker Squirearchy of UK Banking

Abstract

Our next case, Barclays, is in many respects the polar opposite from Lloyds. While Lloyds is a prototype of the focused, specialist bank, Barclays had become a conglomerate, universal bank after the 1986 Big Bang. Often referred to as the bank of the empire, because of its large overseas business since World War I, Barclays had emerged in recent decades as one of the biggest, most diversified, and by far the most international of the British banks. Until the 1950s, Midland had been the UK’s largest bank, but Barclays displaced it after that, alternating at times with NatWest, its arch-competitor.

Barclays was a family bank, formed through regional mergers, and some families hung on for a long time. It had an almost military style, with many faceless, grey types amongst the employees. And it was lacking in vision and an awareness of outside forces. Centralized, bureaucratic and hierarchical, with a command-and-control style, it had been in many respects a metaphor for British institutional public life. And the bank was badly burned as a result.

Bank journalist

Their international division was the flagship bank for them, and it was proud of all the dots on the map all over the world, where Barclays’ branches were located. On strategy, there was none. They were a classic bankers’ bank that did things because they had always been done that way. And they went from unthinking expansion, with weak strategic thinking, reflecting their concern with size, to their infamous rights issue in 1988, to their purge in 1992.

Economist at a London University

It is very institution-minded, and they think of themselves as at the top in the industry. It is a culture of higher-class gentlemen, having formed as an amalgamation of family banks. They want to be always leading the way, to be first movers, much like Citicorp. They go for new directions in a big way.

Bank analyst