) in 1999. The boardroom and management were in chaos, and Barclays' performance compared unfavorably with that of rival Lloyds TSB (LYG
), not to mention giant HSBC (HBC
). But against the odds, Barrett has survived and thrived. He recently spoke with BusinessWeek London Bureau Chief Stanley Reed. Edited highlights from their conversation follow:
On the reasons behind his success:
When you're an outsider coming in, you don't have any emotional equity. You just look at the assets and liabilities before you. We've had a transformation of the entire company, brick-by-brick and business-by-business. We've also changed the culture to a passion to perform at the highest standards, rather than just getting by.
On breaking out of the box in Britain:
We took a long view that a major bank like Barclays had a strategic choice. Did it want to optimize domestic operations and be in a strategic cul de sac or build growth engines of global products? We set out to build [global businesses]. Some were very small at the time.
Now, Barclays Capital, Barclaycard, and Barclays Global Investors can hold their own with the best in the world. Our contribution from non-U.K. earnings has gone from 12% to the mid-20s. This gives us a nice portfolio that plays well on the home front as well as the world stage. That gives us a very attractive platform going forward.
On his role in the company:
I was just the orchestra leader. The turnaround was done by folks who were already here. We've also achieved a smooth and orderly transition by folks from within -- Barclays lifers. [Barrett will step up to the chairman post at yearend, to be succeeded by Finance Director John Varley.]
Why so many British banks turned up on the European BW50:
I'm sorry to say they're all good banks. It's also important to remember that the origins of branch banking were here [in Britain]. The best of the systems [elsewhere] were modeled on what was done here for hundreds of years.
There has also been quite a benign economic backdrop. The U.K. economy hasn't been subjected to the volatility of the U.S. or the sclerosis of Europe. Banks make money on the dynamism of the economy.
On future business prospects:
I see a continuation of the good economic environment. Not gangbusters, but perfectly respectable.
A word of advice:
Beware of naysayers telling you what you can't do. Beware of people telling you about mature businesses. A mature business is one we haven't reinvented yet. If I believed the naysayers, I wouldn't get up in the morning.