Matt Barrett has been in self-inflicted purdah for virtually the whole six months since he was poached to be chief executive of Barclays Bank. Now the affable Irishman, who was once described as the most eligible bachelor in Canada, is out on a charm offensive. Matt Barrett has been in self-inflicted purdah for virtually the whole six months since he was poached to be chief executive of Barclays Bank. Now the affable Irishman, who was once described as the most eligible bachelor in Canada, is out on a charm offensive.
“I’m sick of the sound of my own voice,” he told The Independent on Sunday in an interview that rounded off two days of presentations accompanying Barclays’ strong full-year figures. Despite this he proceeded to give a full tutorial on how he sees the British banking scene, bringing Napoleon, St Sebastian and a one-legged stool into the discussion.Barrett was rather an unknown quantity when he arrived at the Barclays HQ on Lombard Street.

Though Irish he had spent his career at the Bank of Montreal and now spoke with a curious mid-Atlantic drawl. The only things the City knew about him were that he had failed to merge Bank of Montreal with Royal Bank of Canada, and that nude pictures of his former wife, Anna Marie Sten, had been published on the internet. After Martin Taylor had been ejected from the bank with hardly a “by your leave”, and his successor, Mike O’Neill, returned to California after only a day in the job, citing an irregular heartbeat, the fact that Barrett filled the role was a relief.Barrett has managed to avoid any appearances in the gossip columns since he came to the UK. “I’ve been too busy,” he says.Indeed he has hardly appeared on the City pages as the battle for NatWest has deflected attention from Barclays, which was just as well given the turmoil it was in before Barrett arrived.Barrett and his chairman, Sir Peter Middleton, have used the time well. Last week’s figures showed Barclays doing quite nicely, notably in the sexy area of the internet. The bank chose not to give its online operation a stupid name like Egg, Smile or cahoot, but it has still secured 650,000 customers and is on target to exceed a million by the end of this year.This comfortably makes Barclays the most technically adept of all the high street banks. So is this the forward headquarters for an assault on the customer base of Barclays’ rivals?Not yet, says Barrett.”A good offence needs a good defence,” he explains, betraying a greater knowledge of American football than soccer “We have 13 million cuomers We don’t need to go anywhere else.

What we need is to hold on to those customers.”Barrett also wants to make more money out of those customers. This means cross selling, the holy grail of retail banking, and cost cutting – a theme developed by his rivals, Sir Brian Pitman of Lloyds TSB and Fred Goodwin of Royal Bank of Scotland, only a few days before.Barrett says he will cut £1bn from Barclays’ costs over the next three years. Will this be by branch closures? “We will do right sizing with the branches,” he says. (“Right sizing” is American for “closing things and sacking people”.) This includes taking as much of the back-office functions from the branches as possible.How many branches Barclays closes rather depends on how much customers use them. Barrett does not have an ideological love or loathing of branches, so if Barclays customers want their local branches, they’d better visit them more often.Other cost-cutting measures include reducing Barclays’ impressive collection of head offices in the City and around the country. However nice Barrett appears, it is clear that life will not be easy if you are a Barclays banker.All this is aimed at doubling the bank’s “economic profit” every four years. Barrett’s definition of “economic profit” has most banking analysts scratching their heads.

It involves taking the headline profits – £2.46bn in 1999 – and subtracting the risk-weighted cost of capital. What is that? That is the capital base multiplied by the long-term interest rate plus 5 per cent added on to take account of the risk of banking. Barrett says that the “economic profit” of Barclays in 1999 was £1bn, so it should be £2bn by 2003.”I’m not sure if I agree with his calculations, but I’m willing to give him the benefit of the doubt,” says one banking analyst. “Ask me in a year’s time and I’ll tell you if he has moved the goalposts.”What might move the goalposts is if Barclays bids for one of its rivals.

Barrett has no reservations about signalling that it will.”It is good public policy to create national champions,” he says, adding: “I have done my analysis and there is room for considerable consolidation. I think there are too many sub-scale players with narrow product ranges, and this creates excess capacity.”Barrett is a firm subscriber to the Sir Brian Pitman philosophy of consolidating in the UK before you look anywhere else. “It is important to protect your domestic flank before you venture beyond your borders,” says Barrett. “Napoleon – and quite a few other military strategists – learned that.”He also believes in expanding your product range as far as you possibly can – which means suggestions that the bank might sell Barclays Global Investors, the world’s largest and most efficient fund manager, are wide of the mark.