BARCLAYS AXES INVESTMENT BANKING CHIEF
Jes Staley takes control in battle to see off corporate raider
BARCLAYS has pushed out the head of its investment bank as it seeks to fight off corporate raider Edward Bramson. In a major rejig of its prized investment arm, boss Tim Throsby ( pictured below) is leaving after just two years.
Chief executive Jes Staley will now take personal charge of investment banking.
It comes as Barclays fends off Bramson, who has demanded a seat on the board and is thought to want drastic cutbacks in the investment bank.
Bramson, who controls a 5.51pc stake in Barclays, has said the division is sluggish and unprofitable, and holds the bank back.
In a tacit admission that the 68-year-old activist investor has made valid points, Staley( pictured right with his wife Debbie) said returns are getting better but are still not good enough. He said last year’s performance was a significant improvement ‘but not yet where we need it to be’.
Staley said the priority should be making Barclays a better competitor in investment banking, rather than abandoning it altogether, adding: ‘Competing in the top tier of global corporate and investment banking, enabled by our size, and commitment across asset classes, is important for Barclays’ future returns. And we demonstrably do compete in that top tier.
‘I have decided to change the leadership model in order to bring oversight and accountability for the performance of the corporate investment bank much closer to me.’
Barclays insisted the changes would still be happening if Bramson was not a shareholder.
Until now the investment bank has been part of Barclays’ international arm, which also includes overseas retail and credit card operations. This division has been overseen by Throsby, who Staley, 62, worked with at JP Morgan and who was headhunted to do the job two years ago.
But it is now being split up, with foreign retail banking to get lumped in with Barclays’ consumer and small business operations in Britain. Ashok Vaswani, who has overseen UK retail until now, will be given responsibility for all consumer lending across the world.
The investment bank will be overseen directly by Staley.
It effectively means Throsby no longer has a job.
It is understood that the plan is supported by Barclays’ next chairman Nigel Higgins, who is taking over at its annual meeting in May.
Barclays hit out at Bramson this month, when current chairman John McFarlane warned that his proposals would hurt shareholders. Bramson’s reported plans have been considered and dismissed because they would not boost profits, the bank has said.
McFarlane said: ‘Based on his track record, the board believes that the presence of Mr Bramson on the board would be unnecessarily destabilising for management and the talent we employ more broadly in the group.’
Bramson has forced a vote of investors at the annual meeting on whether he should get a board seat. Shares rose 1.5pc, or 2.24p, to 155.54p.