Barclays, expected to lead the ranks as Europe’s most profitable bank with an estimated £10bn of net income when it reports results next week, is a shining example of how to stay upright when all about you are flailing. Here are the golden rules:
1. Participate in auctions for banks if you must, but avoid succeeding – especially when said transaction takes place on the cusp of the mother of all financial crises
2. Ditto for distressed US banks
3. Just say no to state aid
4. When disposing of toxic assets remember the old tricks are the best: sivs fell into disrepute, but with a new name and sounder financing they are a useful tool for magicking assets off the balance sheet
5. Keep on banking
Of course, even a profitable bank becomes ensnared in the populist and regulatory backlash. Barclays is expected to trim bonus payouts, cutting its compensation ratio from 44 per cent to 38 per cent according to Sky News. And under the Basel III proposals, it will take more than the latest crop of profits to bolster its capital cushion.
