Barclays CEO Venkat on turning around a FTSE 100 bank and leading through cancer

"Banks actually just do a few fundamental things," says C.S. Venkatakrishnan, the CEO of Barclays, who is universally known as Venkat. "We store your money, we lend your money, we move your money, and we help you invest your money. That's what we do. At the core foundation of it is trust."

It's a deliberately simple framing from someone who has spent his career in the complex end of finance – from quantitative programming at JP Morgan to chief risk officer and then chief executive of one of Britain's oldest institutions. Speaking to Sir Richard Harpin on the Business Leader podcast, Venkat shared his inside views on the state of UK lending and the motor finance scandal, plus his experience of running a vast global bank while receiving cancer treatment.

In our interview, Venkat shares

• The inside story of Barclays’ restructuring in 2024
• His experience of working through cancer, and the unintended impression he fears this gave to his colleagues
• Tips on how to make M&A work
• His take on the 1973 Consumer Credit Act and why it’s holding back consumer lending

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The turnaround: A bank that had forgotten its home

When Venkat set out his three-year strategy in 2024, the diagnosis was blunt. Barclays was trading at roughly half its book value – a 50 per cent discount that implied, as he puts it, that the market either didn't believe the bank would generate the profits it projected, or expected higher losses than management did.

"Which means if you take all the assets in the bank and you value them and discount the cash flows from them, they were worth twice what the people were telling us the bank was," he says. "Which was unacceptable."

The deeper problem, he believes, was strategic drift. "We've been here for 335 years. This bank is older than the Bank of England. We started in 1690. This is our home. And by becoming a big international consumer and investment bank, we'd forgotten our home."

The strategy that followed did two things: recommit to the UK – including deploying an additional £30bn in risk-weighted assets into the domestic economy – and make the investment bank a smaller but more profitable part of the overall group. Barclays reorganised into five distinct divisions, creating a separate UK corporate bank alongside the ring-fenced retail bank, and a standalone private banking and wealth arm. “Touch wood,” Venkat says – tapping at the podcast table – it's working on all three fronts.

"The Consumer Credit Act is severely and unreasonably restricting lending"

Venkat is unusually direct in his opinions on the UK’s regulatory environment, and his most pointed remarks concern a piece of legislation most people have never heard of.

"There is something in the UK called the Consumer Credit Act [1974], which has severely, in my opinion, and unreasonably restricted the ability of banks to lend to consumers," he says. The practical consequence is a bank liability that he finds difficult to justify: "If you wanted to put in a heat pump in your house or a solar panel in your house and it didn't work as advertised, then the bank is on the hook – if they lent you money to buy the heat pump or install the solar panel. Which is then making the banks risk-averse."

His message to the next chancellor is direct: "I would ask them to look closely at the Consumer Credit Act. I would ask them to examine how we can increase the amount of lending into the UK economy, not just to companies but to individuals. More broadly, growth is the cure that lifts all boats."

On motor finance – a live controversy, with hundreds of millions of pounds in provisions being taken across the sector – he is careful but not defensive. "It's not like the banks did everything perfectly. We did not. And for what we did wrong, we should be liable and we should pay." But, he adds, "I think both in terms of the amount of look back and the way that some of these calculations have been done, it's unreasonable."

Barclays' own exposure is compounded by what he sees as an injustice of timing. The bank exited the motor finance business entirely in 2019 – Venkat's own call as chief risk officer at the time – precisely because the consumer environment made it unviable. "And even though we got out in 2019, we've still taken hundreds of millions of pounds of provisions for things between 2014 and 2019 – and we were a small part of the market."

Ring-fencing: Not the problem people think it is

One piece of conventional wisdom Venkat pushes back on is the idea that ring-fencing – the post-2008 rules requiring large UK banks to separate domestic deposits from investment banking operations – is suppressing UK lending. "I frankly don't think that's true. I think there's nothing about ring fencing that restricts the major UK banks from lending into the UK economy."

The lending problem, in his view, is not about capital structure. It's about the consumer credit framework on one side, and on the other, what he sees as an underdeveloped equity culture that leaves British individuals underinvested and British companies underfunded.

The UK’s missing equity culture – and what Barclays is doing about it for its own staff

"I believe very, very strongly that the equity culture in the UK has to improve. That from that point of individual investors, there runs a golden thread to capital formation, to business growth, for small companies to become large companies."

UK individuals hold a far smaller proportion of their wealth in equities than they did 35 to 40 years ago, when the ratio was comparable to the US. Barclays has tried to address this from the inside out: for the past two years, every employee below senior management has received £500 a year in Barclays shares, with no conditions attached. The explicit aim, he says, is "to teach them the value of equity ownership."

On acquisitions (Barclays has bought Kensington Mortgages, Tesco Bank, Go Henry and a US direct-to-consumer lending platform in recent years), Venkat's advice is consistent with his broader risk philosophy: don't overpay, and do the integration work before you close. "Make sure you can integrate it well – both culturally and operationally... You have to do the due diligence on technology first, especially these days when everything is technology."

"The first question I asked was: can I work while I get this treatment?"

In late 2022, four months after dealing with a significant securities issuance error that cost the bank several hundred million dollars to resolve, Venkat discovered that he had cancer. He had spent a weekend working with the Bank of England on a facility to support pension funds during the gilt crisis, went for a run on the Monday morning, and felt a lump on his neck when he got home.

"The first question I asked, which my wife was not happy with me asking, was: can I work while I get this treatment? And the doctor said, not only can you, you should."

For four to six months, Venkat ran Barclays remotely, via video call. He's candid about one miscalculation: "One of the mistakes I made early on is when I said I was doing this, I underestimated the impact on my colleagues." Some of these colleagues, Venkat reflected, had wondered whether they would be expected to do the same should they fall ill, or whether his ability to work through it was a privilege of his position that wouldn't be available to them.

The bank has since been explicit: "We've made it very clear to our people that if they want to work, we support them through it and any illness, but it's not a requirement."

The experience did change him, though perhaps not as much as he intended. "I said to myself that I have to pace myself better, look after my health more... I try to say that I'll do the things I want to do and I won't do the things I don't want to do. I've not been as good about that."

Risk management, and what its failure looks like

Venkat joined Barclays as chief risk officer in 2016, and the discipline of that role runs visibly through his thinking. His definition of a risk management failure is precise: "You will lose money. But you should never lose more money than you thought you could in a situation. And you shouldn't lose money in a way you had not anticipated. If either of those two things happens, it's a risk management failure."

It's a standard he applies as much to himself – the over-issuance of US securities early in his tenure as CEO is a case in point – as to the bank's exposure to external shocks.

Venkat's advice for UK scale-ups

Asked what he would tell founders of businesses turning over between £10m and £100m and trying to scale, Venkat offered four things:

• Be ambitious: "The great thing about the UK is the world is your oyster," Venkat says
• Work with your banks to build properly financed business plans
• Push back on the government when regulation is restricting your customers' ability to buy your products
• Hire good people and manage yourselves well

On the broader question of whether the UK or the US is the better place to build a business, he lands firmly on London's strengths: "There's a reason London has been the centre of global finance, either number one or number two, for three hundred years. It is an ecosystem with all the skills." All the large American banks, global banks, and hedge funds maintain major London operations for a reason, he says. "London is as good a place as any to serve the world."

And on leadership philosophy, distilled to its simplest: "If you put the company first and do a good job without thinking about what's in it for me, actually what's in it for you will be the best for you."

Venkat spoke to Sir Richard Harpin on the Business Leader podcast. Listen to the full episode for more, including his views on the future of UK venture capital, the bank referral scheme, and a verdict on the England–India cricket series.