Barclays Plc (BARC)’s investment-banking chief Rich Ricci and wealth-management head Tom Kalaris, two of the last remaining members of former Chief Executive Officer Robert Diamond’s management team, will step down.
Ricci, 49, will be replaced by Eric Bommensath and Tom King, 52, as co-CEOs of corporate and investment banking in May, the London-based bank said in a statement today. Peter Horrell, who joined the bank in 1990, will become interim head of the wealth unit.
Chairman David Walker and CEO Antony Jenkins, who took over after the lender was fined an unprecedented 290 million pounds ($442 million) in June for rigging the London interbank offered rate, are trying to cut costs by stripping out layers of management and boost regulators’ confidence in the company. An internal report this month criticized pay at the investment bank and urged the company to boost transparency.
“Jenkins has been trying to distance the bank from some of the excesses of the previous regime,” said Chris Wheeler, a financials analyst at Mediobanca SpA in London. “Ricci was closely associated with the previous management team, having worked very closely with Diamond.”
The stock fell 2.3 percent to 283.75 pence in London trading, for a market value of about 36.5 billion pounds.
“A major area of focus for me has been to streamline and improve how the bank is managed, while strengthening control,” Jenkins said in today’s statement. “I want to de-layer the organization, creating a closer day-to-day relationship and clearer line of sight for myself into the business.”
Ricci, a 19-year veteran of the bank, won’t receive a severance payment, and will instead get as much as a year’s salary of 700,000 pounds. He received 5.7 million shares valued at 17.6 million pounds when they vested in March. He didn’t reply to an e-mailed request for comment. Diamond, Chairman Marcus Agius and Chief Operating Officer Jerry Del Missier all stepped down in the wake of the Libor fine.
“This as an inevitable and appropriate piece of transitioning,” said Ian Gordon, a banking analyst at Investec Plc (INVP) in London. “Few tears will be shed and the reshuffle will be broadly welcomed.”
Barclays said in the statement that it plans to refocus the securities unit on the U.S., the firm’s largest source of income after Britain. Skip McGee, who joined Barclays when it acquired Lehman Brother Holdings Inc.’s U.S. operation out of bankruptcy in 2008, will become head of Barclays’s Americas business, the bank said today.
“There is a clear need for even more effective execution of Barclays’s operations in the region,” the bank said. “We want to have the strongest possible relationships with our U.S. regulators.”
The firm is seeking to take advantage of better investment banking conditions in the U.S. compared with Europe. Fees for arranging mergers, equity, bond and syndicated loan sales climbed 16 percent in the U.S. to $8.9 billion in the year to March 18, according to data compiled by New York-based research firm Freeman & Co. By contrast, fees dropped 15 percent to $3.4 billion in Western Europe in the same period, the data show.
Barclays hired King, a U.S. national, from Citigroup Inc. in 2009. After serving as global co-head of corporate finance in London, he was appointed deputy head of the investment-banking division in October 2012 and relocated to New York. He has an MBA in Finance from the Wharton School of the University of Pennsylvania.
Bommensath, who joined in 1997 from Bankers Trust as head of derivatives in Europe, will continue as global head of markets, Barclays said. He is a former head of the investment bank’s fixed-income, currencies and commodities business.
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