Barclays bank chief suffers vote of no confidence

Marcus Agius has suffered the backlash of shareholders’ ire at the bank’s recent third-party funding, with 16.3 per cent of the investor base opposing his reappointment. The vote was thought to be spearheaded by insurer Legal & General, which owns four per cent of the company's shares, and shows just how angry the bank's shareholders still are about the bank’s controversial fundraising last summer when it gained funding from a Middle East consortium by offering better terms than those enjoyed by existing shareholders.

At the annual shareholders' meeting yesterday Agius acknowledged the rift and even expressed "sincere regret" for investors' losses. However this was not enough to stop the resounding vote of no-confidence.

Even the announcement by the chief executive John Varley that plans are afoot to resume the company’s dividend in the second quarter failed to placate angry investors. He also said that Barclays would increase lending to Britain's customers by £11bn this year to £194bn.

The meeting took place the day after it emerged that Qatar Holdings, a unit belonging to sovereign fund Qatar Investment Authority and the focus of the initial controversy, had reduced its holding in the bank.

It sold its shares down to 5.8 per cent from 6.4 per cent by selling 35 million shares at around a 20 per cent loss compared to its purchase price of 282p. In recent weeks Barclays shares have surged from a low of 47p, as investors regained confidence in the organisation.

WHAT THEY ARE SAYING
George Hays, on Breakingviews.com: "The endorsement of the board fell a bit short of jubilant. All the members but one received at least 97% positive votes. The odd one out was the chairman, Marcus Agius, whose approval rating was only 84%. That’s not a sign to resign, but it’s a significant warning. From this perspective, his pledge not to raise any further capital looks risky. If Barclays is forced to do a u-turn, the chairman’s position may look dicey again."

Editorial, Evening Standard: "Agius knew his job. He not only chaired the meeting with some style and aplomb but he apologised profusely on several occasions. The institutions, who as usual failed to make their voices heard at the meeting, had already ensured his re-election as chairman. He knew he had to face the small (why are none of them ever tall?) shareholders and take their criticisms, be it on bonuses, Dubai tennis, awkward staff or sponsorship of the Premier League. He took it like a man. The shareholders, while not cheering him to the rafters, applauded his performance. Then they streamed into the Benjamin Britten room for the real business of the day - sandwiches, cakes and 'one small bottle of red or white wine'."

Peter Montagnon, director of investment affairs for the Association of British Insurers, in the Times: "Last year there was clear concern over the way in which the company chose to raise new capital. This vote is a reminder that shareholders will react if preemption rights are ignored." ·