Sherborne Investors Management LP Response to Barclays PLC's Recent Letter

NEW YORK, April 15, 2019 /PRNewswire/ --

Dear Fellow Shareholder,

We have reviewed the Barclays PLC ("Barclays") board's response to our letter to you of April the 8th. We believe that our letter has already dealt with the substantive issues that were raised in the board's AGM notice and their most recent letter.

A thorough reading of our prior letter will show that, where necessary, we have already made the appropriate adjustments to provide consistent, fair, and accurate comparisons between Barclays and its chosen competitors. We, therefore, find no reason to change our numbers or the inescapable conclusion that the difficulties experienced by Barclays' Corporate and Investment Bank ("CIB") result from its weak strategic position in the modern CIB marketplace and we believe that remedies should be approached accordingly. The directors' response letter does not attempt to address this structural issue.

Mr. Nigel Higgins, the new chairperson, has now publicly joined the other directors in confirming his complete support for Barclays' current strategy and he proposes to lead a search for more directors with banking backgrounds, presumably to refine this strategy. By our count, five of the current directors already have banking or advisory backgrounds and we wonder how adding more could possibly make any substantive difference.

Given the difficulties that they face, we believe that the executive team assembled by Barclays' Chief Executive, Mr. Jes Staley, has been extremely effective in delivering on the goals that the board set for them, and could be successful if given a better strategic mandate. According to media reports, which we have not verified independently, Mr. Tim Throsby, the head of Barclays' CIB, who has since left the business, recently told the bank that the goals that the board has set for the CIB and the financial returns that it has promised to shareholders are "irreconcilable". We hope that a warning of this nature, from the most senior executive charged by the board, until recently, with carrying out its CIB strategy, will increase the board's awareness that the structural contradictions in its strategy that we have consistently pointed out are placing unreasonable demands on management which may well result in further organisational instability.

The growing imbalance between risk and potential return, highlighted above, is at the heart of what we have been saying to the directors since the beginning of our engagement with them more than a year ago. In our firm's professional opinion, the stubbornly low valuation that the market accords to the shares of Barclays will continue until the board finally adopts a strategy that is more realistic and shareholder orientated.

It seems to us that a board comprised of twelve or more senior business people should be able to accommodate and resolve occasional differences of perspective and arrive at better and more sustainable outcomes for shareholders than a board that cannot. An alternative voice on the board would seem to be healthy for the company and its shareholders.

We have disclosed in various, publicly available, filings that our firm now has almost £1 billion at risk in Barclays. Our public investment record shows that we have consistently assisted boards, that were initially reluctant, to deliver major increases in value for all of the shareholders in their companies while we were a shareholder and for years thereafter. We believe that, given mutual goodwill, and some change in perspective, Barclays offers similar opportunities.

After such a long period of avoidable underperformance, we respectfully request that, in the interests of all shareholders, you vote IN FAVOUR OF Resolution 24 to elect Mr. Edward Bramson, an experienced member of our firm, to the board of Barclays.

Yours faithfully,
Sherborne Investors