Deposits are praised by Barclays CEO, board is defended over Staley scandal

Despite the turmoil affecting smaller US lenders during the first quarter, C.S. Venkatakrishnan, director of the UK banking sector, believes UK banks have weathered the storm.

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A Trade Algo interview with Barclays Plc CEO on Thursday was his first since finishing three months of cancer treatment earlier this year, so he said that the UK had not been affected by that deposit flight across banks. He said that his deposit franchise has performed extremely well and predictably throughout the year.

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After Credit Suisse Group AG and numerous smaller US lenders were upended as a result of customers pulling deposits, investors have started paying attention to how money flows into or out of banks. Venkatakrishnan noted in his report that Barclays has had a record year in terms of deposits with a rise of around £10 billion ($12.5 billion) in the first quarter. The bank was also benefitted primarily due to corporate cash deposits.

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He believes despite recent liquidity issues at some lenders, there will be changes in bank regulation as a result of the recent problems. Regulators are likely to review how they evaluate liquidity and "will also likely have to examine the way they supervise large banks versus smaller ones," he advised.

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There was a surprise increase in Barclays' fixed income revenue at 11:49 a.m. in London, after its traders achieved a surprise increase over their expectations with a strong performance in the past week

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He said this forced period of working from home gave him a renewed appreciation for working with his colleagues in person, and the enforced period of time working from home had brought a restored sense of solitude to their work environment. Venkatakrishnan told me he was in remission after having completed his treatment for non-Hodgkin lymphoma.

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Additionally, Mr. Staley defended his board's support for former CEO Jes Staley earlier this year, which was motivated by his links to JPMorgan Chase & Co. member Jeffrey Epstein at the time. 

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Staley’s decision to leave the bank on good terms has come under scrutiny recently, following a number of US legal cases that revealed new details about his interactions with Epstein before joining the British bank, including excerpts from hundreds of emails between the two men. These new details were revealed in a number of US legal cases that have been filed against the bank in the last few months.

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In the bank, Venkatakrishnan noted that new allegations have been brought to our attention — they are serious allegations that we have discussed with our board,” pointing out the bank would have conducted rigorous processes to reach its decisions regarding Staley. Our board is an extremely thoughtful, deliberative group of people, which I know very well. While I was not a member of the board at the time of my appointment, I know that each of them employs a very careful and detailed process to reach their decisions.