Executive Summary
Barclays (LON:BARC) is a UK-based financial services provider that is structured into two business clusters: Global Retail and Commercial Banking, and Investment Banking and Management. The company provides banking services to both retail and commercial customers, with operations in over 50 countries. Barclays employs 156,000 people worldwide and has a customer base of 48m. Unlike a number of other UK financial institutions, Barclays refused the offer of government funding during the ongoing global economic crisis in 2008. This will give its directors more control over the bank’s strategic direction going forward.
Company History
The company has been established for over 300 years. A summary of key milestones is outlined below.
- 1690: John Freame and Thomas Gould start trading as goldsmith bankers in London;
- 1736: James Barclay, John Freame’s son-in-law becomes a partner in the business;
- 1896: Barclay & Company Limited is formed through the amalgamation of 19 other banks, with 182 branches and deposits of £26m;
- 1917: Barclay & Company Ltd. becomes Barclays Bank Ltd.;
- 1918: Barclays Bank becomes one of the UK’s ‘big five’ banks through an amalgamation with the London Provincial and South Western Bank;
- 1966: the UK’s first credit card, Barclaycard, is launched;
- 1985: Barclays Bank Ltd. becomes Barclays Bank P.L.C.;
- 2006: the OnePulse card, incorporating Oyster cashless technology, is launched.
Current Events
- 2007: Barclaycard Breathe is launched, the first credit card to reward customers for making environmentally aware purchase decisions;
- 2007: Barclays expands operations in India and Asia;
- 2008: Barclays announce a mass roll-out of contactless-enabled debit cards;
- 2008: the company expands in Pakistan and Russia;
- 2008: Lehman Brothers North American investment banking and capital markets businesses are acquired;
- 2009: the company acquires private bank PT Akita in Indonesia;
- 2009 Barclays decides not to participate in the government's asset protection scheme [1]
- 2009: the bank announces a £6.1bn profit result for 2008.
Business Model
Barclays has a diversified business model, within which highly profitable divisions such as Barclays Capital, the company's investment banking division, have helped to support less successful divisions, like Consumer and Commercial Banking. [2]
Whereas Barclays Capital increased profits by 100% in the first half of 2009, to £1.05bn, the Retai and Commercial Banking buisnesses flagged due to a doubling of impairment charges. The Western European Retai and Commercial Banking business (including UK) contributed £422m to an overall pretax profit result of £1.89b for…
