If Barclays (BARC) chair John McFarlane stuck the knife into the bank's chief executive, Antony Jenkins, the subsequent rise in the share price showed that shareholders were only too happy to help twist the blade. This seems counterintuitive: the bank has been the best performing of the 'big four' lenders over the past year, despite misconduct fines clouding its first-quarter results. Look at the share price since Mr Jenkins' arrival, though, and the dissatisfaction with the bank's performance is easier to understand (see graph).
The predominant view is that the chief executive's strategy for cutting fat from the business was not aggressive enough for the shareholders and the board, so he had to go. David Smith, an equity income fund manager at Henderson Global Investors, says the "execution and speed of the run-off have clearly been a frustration", even if non-core areas have been identified.
Of particular focus is the investment bank. Market-watchers believe there is scope to reduce management salary costs and to focus operations on areas that provide higher returns with less commitment of capital, such as M&A advisory. Sandy Chen, banking analyst at Cenkos, calls this an "aggressive pruning" of the division. Mr Jenkins, with his retail banking background, was not considered the person for the job - in the market announcement, deputy chairman Sir Michael Rake said "a new set of skills" were required.
Cost-cutting is a stated focus for the insurgent board, who cannot have failed to notice the widescale programmes initiated by competitors. Last month, HSBC (HSBA) announced its target of $5bn (£3.3bn) in annual savings by 2017, cutting tens of thousands of jobs and selling or shrinking its underperforming operations in Brazil and Turkey.
But while words such as "lean" and "aggressive" play well with analysts, the reality is more difficult - the details of HSBC's proposals to boost its return on equity were met with a slow handclap by markets. Investec Securities forecasts return on equity (RoE) for Barclays of just 2 per cent this financial year, from 1 per cent in 2013 and the loss delivered in 2014.
