Barclays CEO may eye cuts
Barclays’ newly minted chief, Antony Jenkins, is likely to slowly shrink the sprawling UK financial firm’s investmentbanking arm, industry players predict.
Jenkins, a 51yearold Brit, assumed the CEO post yesterday, less than two months after Bob Diamond resigned the post in the wakeofthe massive interest raterigging scandal.
Also in July, Chief Operating Officer Jerry del Missier, a confidant of the Americanborn Diamond, resigned.
Barclays was accused of trying to manipulate an interest rate known as the London interbank offered rate, or Libor.
A veteran Barclays executive, Jenkins was head of the bank’s retail operations, and his appointment is widely viewed as a signal that the firm is aiming to place more emphasis on bread and butter retail banking over the flashier trading and investment banking units that became a centerpiece of Diamond’s tenure.
Under Diamond, Barclays scooped up Lehman Brothers North American in 2008 during the height of the market’s turmoil.
Run by Rich Ricci — a Diamond appointee — the investment bank still generates more than half of Barclays’ revenue.
“Investment banking is highly desirable, but it’s also highly risky,” said Aite Group financial analyst Alois Pirker.
“Any new CEO has to make an assessment of the businesses and see what works and what doesn’t work,” he noted.
Jenkins might be reluctant to make a lot of big moves quickly, sources inside the bank said, recognizing that the firm already has experienced tremendous upheaval.
Jenkins told Bloomberg in an interview that he would outline his plan for the firm in the first quarter of next year.
Jenkins’ move to forge a strategic vision for Barclays will come in the face of new capital requirements set to be imposed upon European and US banks, forcing them to set aside more cash to protect against potential losses.