Barclays selects Boston Consulting Group for strategy refresh

05 June 2023 Consultancy.uk 3 min. read

Consultants from Boston Consulting Group have been selected for a new strategic review with Barclays. The mandate will cover all of the bank’s units, helping it to find ways to improve its underperforming share values.

Barclays is a British multinational universal bank, headquartered in London. Following a booming 2022, Barclays is coming off the most profitable two-year stretch in its more-than 400-year history, but its share price is continuing to lag – having failed to recover half of its pre-crash peak in 2007.

As it looks to improve its valuation, Barclays has reportedly selected Boston Consulting Group to undertake a strategic review of its operations. In order to see what can be done to boost Barclays’ longstanding weak share price, BCG is understood to be looking at the level of risk-weighted assets in its investment bank wing, as well as how to best position Barclays’ wealth and retail businesses.

Barclays selects Boston Consulting Group for strategy refresh

That latter aspect of Barclays’ business Barclays may have already been earmarked for closer inspection, as it has long been noted as a potential underperformer. Barclays’ retail wing comprises one of the UK’s largest retail banks – sitting alongside an international credit card business and a global investment bank. However, Bloomberg Intelligence recently found that its price-to-book value remains marooned below 50%, behind many other listed UK lenders.

According to a source familiar with the matter speaking to Bloomberg, it is unclear what the scope of potential recommendations from the review may be. However, with the mandate covering all of the bank’s units, the engagement is projected to cost Barclays some £10 million in fees.

While BCG has so far declined to comment on the story, a spokesperson from Barclays confirmed that as is common for the world’s biggest financial institutions, Barclays “frequently work with various external consultants”. They added that while the group’s “robust mix” of businesses “continue to perform well”, “engaging consultants is part of the normal course” to ensure the bank is maximising its potential. 

The news comes after Barclays Group Chairman Nigel Higgins acknowledged frustrations at depressed share performances. Speaking at the group’s annual general meeting in May, Higgins noted that “shareholder returns have been disappointing for most of the past decade”.

BCG is one of the three largest strategy firms in the world. Alongside fellow MBB members McKinsey & Company and Bain & Company, the firm is regularly picked by top corporate entities and governments to help plan strategic overhauls, and respond to some of the biggest challenges currently facing organisations. Due to this reputation, it is not the first time BCG has worked with Barclays.

In 2012, Barclays launched another review into its business practices, led by Anthony Salz. Following a number of reporting scandals, the review built up a detailed map of the bank’s most important processes. BCG was named as the principal professional services group to will support that investigation, too.