Barclays Announces Strategy Update with Unusual Promotion; SocGen CEO Confesses Loss of Focus for 5 Years

Personnel Actions: Implications for Organizational Strategy

When endeavoring to discern an organization’s trajectory, the dictum “personnel is policy” often proves apt. Nevertheless, instances of promotions and leadership changes can, at times, provide an ambiguous portrayal of an organization’s true course. Such is the case with Barclays’ leveraged finance business, wherein Na Wei has assumed the role of sole head, in close proximity to the bank’s impending strategy update.

Across the past year, the leadership of this business unit has been marked by tumult. Last April, Wei was designated as global co-head alongside Tom Blouin, a period during which leveraged transactions were challenging the bank’s capital measures. However, by November, it became apparent that Barclays was contemplating a reduction in its risk appetite, as well as the management of its exposures.

Superficially, Wei’s promotion appears logical, given her history of spearheading Barclays’ leveraged finance on the EMEA front, particularly her involvement in transactions with prominent financial sponsor clients. There has also been conjecture that her appointment aligns with a strategy to diminish the overall size and capital requirements, while enhancing the return on capital, ultimately rendering the business more profitable.

However, Barclays appears to have more ambitious objectives in mind. Travis Barnes, the global co-head of capital markets, has articulated the bank’s aspiration to regain its standing as a premier player in leveraged finance by 2024. This signals an intent to expand their leveraged finance business, contravening the assumption that the bank would veer towards a smaller, more lucrative model.

The true impetus behind Wei’s promotion currently remains enigmatic. One prospective rationale is that it signifies a strategic initiative to nurture an up-and-coming luminary, particularly in the wake of JF Astier’s reassignment to head the financial sponsors’ group. Alternatively, it may serve as a precautionary measure against transitional risks, as the bank explores its future alternatives.

Meanwhile, recent disclosures from SocGen reveal that Yann Garnier, head of global markets sales and research, openly conceded that the bank lost its bearings between 2015 and 2020. He reflected on how the bank’s focus shifted from devising innovative products to pursuing market share and exceedingly competitive returns. This admission sheds light on the bank’s struggle to prioritize strategic clients over volume and revenue.

As we anticipate Barclays’ forthcoming strategy update on February 20th, the import of Na Wei’s new role remains uncertain. The revelations from SocGen underscore the imperative of upholding a discernible strategic focus, as well as the potential ramifications of deviating from this approach. Expect additional updates as these narratives unfold.