Barclays Says Its Next Investment Bank Boss Will Be an Outsiderby
Staley, McFarlane face shareholders at bank's annual meeting
Diversified bank `safest,' CEO tells investment bank critics
Barclays Plc indicated it has ruled out internal candidates to lead its investment bank as Chief Executive Officer Jes Staley, himself an external hire, moves his search outside the firm.
“We will appoint a new head of corporate and investment banking externally,” Chairman John McFarlane said at the lender’s annual shareholder meeting in London on Thursday. A day earlier, Staley said on a call with reporters that the bank had "a slate of internal candidates and a slate of external candidates."
The CEO spent more than three decades at JPMorgan Chase & Co. and has remade Barclays’s executive suite, hiring a raft of staffers from his old bank including including C.S. “Venkat” Venkatakrishnan as chief risk officer and Paul Compton as chief operating officer. The new head investment banker will succeed Tom King, who left on March 4 after six years at the bank and told colleagues he didn’t want to be subject to Britain’s senior managers regime, people with knowledge of the plans said at the time.
Staley said Wednesday that having Joe Gold as deputy CEO of the non-ringfenced division, created in March and including the investment bank, helps give the bank time to “do a thorough and complete search" for the right executive. “We want to make sure we do a thorough look at all the potential candidates internally at Barclays and all the candidates outside,” Staley said Wednesday. Gold had served as the head of Barclays’s U.S. investment bank.
The annual general meeting is the first time Staley has faced smaller shareholders after taking over in December. He asked them to endure short-term pain during a restructuring, which he funded by unexpectedly slashing the dividend for the next two years. Staley must also convince investors he is right in planning to exit Barclays’s Africa business in order to keep an investment bank that has been hit by years of misconduct fines.
“I realize our position in investment banking raises questions, as we have a substantial position in a sector which is facing difficult times, and indeed produces a return well below what is required,” Staley said Thursday. He argued that the “safest” strategy in uncertain times was having a diversified bank that did not rely too heavily on any one type of business.
Barclays shares fell 1.3 percent at 1:29 p.m. in London trading. After rising almost 5 percent Wednesday after the bank’s first-quarter earnings report, they ended that day little changed as concern about the growth outlook outweighed better-than-estimated revenue. The stock is down by about a third from last year’s AGM.
McFarlane, 68, said at the AGM that he takes “full personal responsibility for the situation of the company.’’ He had pledged last July to double the share price over the next three to four years.