Comment: Piling insult upon injury, the banks haven’t learned

By TERRY MURDEN
Published on 29/07/2012 00:00

VINCE Cable, the Business Secretary, is fond of saying that the banks just don’t get it. On the evidence of Friday’s almost farcical conference call with the media, Barclays clearly still doesn’t.

Outgoing chairman Marcus Agius, hardly a star performer at the recent treasury committee hearings, thought it appropriate to bury on page 87 of its 92-page half-year results the fact that its finance director Chris Lucas is under investigation by the regulator.

On the one hand, it appeared to be trying to conceal crucial information, on the other it looked like Lucas was being hung out to dry as the bank was not forced to name anyone. Agius didn’t seem to understand the fuss, giving the impression that he believes the investigation into disclosures on commercial agreements in 2008 will come to nought.

Aside from the seemingly endless self-inflicted wounds suffered by all the banks – what Royal Bank of Scotland boss Stephen Hester refers to as “treading on mines” – there are indications of a sector showing its resilience to whatever is thrown at it.

Barclays figures were impressive, beating expectations, and it is worth noting that the investment bank (the much-derided casino operations) was the biggest contributor to the improved figures. In spite of the current crises, whoever takes control at Barclays will inherit a bank in good shape.

Hester will use Friday’s half-year announcement to offer more apologies for mis-selling of payment protection insurance and for the IT meltdown that enraged customers, but is unlikely to say more about the Libor issue beyond confirming that he expects the bank to be fined.

Like Agius, he’ll attempt to point to the good bits, especially the repair work on the balance sheet that he must have hoped would command his full attention when he was appointed.

Hester could never have imagined that the bad news would keep coming, but he has learned that it’s no use trying to hide behind the curtains. The public and investors alike demand full transparency. Let’s hope he doesn’t have any page 87 tricks of his own.

What’s not to like, Mark?

SOCIAL media may be the future, but it remains an uncertain one as far as investors are concerned.

Facebook’s botched flotation in May continues to haunt chief executive Mark Zuckerberg and those who were encouraged to pour money into the mammoth share issue on expectation of an immediate premium.

Not only were there some quick exits following equally rapid revisions to the company’s financial prospects, the questions surrounding the platform’s ability to generate sufficient revenue continue to be asked.

Floated at $38 (£24) a share, the firm now trades at just under $24 after seeing $10 billion wiped off its value following a second-quarter loss.

Ironically, Facebook is suffering from users switching from desktop computers to mobile phones which presents a unique problem for advertisers.

There is a belief among its supporters that Facebook will somehow resolve ways to harness the full revenue-earning potential of its fast-growing army of users, up 29 per cent on last year to 955 million.

However, the flip side is concern that the company will fail to keep pace with those users, and how they choose to use social media.