Barclays sacks CEO over slow pace of change

Mr Antony Jenkins took over as Barclays CEO in 2012. The bank now says "new leadership is required".
Mr Antony Jenkins took over as Barclays CEO in 2012. The bank now says "new leadership is required".PHOTO: BLOOMBERG

Bank's directors concerned about Antony Jenkins' leadership style; shares jump by up to 3.5% after ouster

LONDON • British bank Barclays has ousted chief executive Antony Jenkins after three years in the post, saying yesterday it has decided that new blood will help accelerate strategic change and boost shareholder returns.

The surprise ouster comes just three months after Mr John McFarlane took over as chairman and signalled his intention to speed up the bank's turnaround plan. He will assume executive duties until a new appointment is made.

Mr McFarlane said in a conference call that the bank's independent directors had been concerned about Mr Jenkins' style of leadership for some time and that he had spoken to the CEO last week about his future. His exit was confirmed at a board meeting late on Tuesday.

Mr McFarlane pledged to tackle a "cumbersome, bureaucratic" bank through deeper cost cuts and to accelerate capital generation.

Mr Jenkins, 53, a former consumer banker, took over from Mr Robert Diamond in 2012 after the bank was fined for manipulating benchmark interest rates.

While Mr Jenkins set up a bad bank, eliminated thousands of jobs and sold assets to bolster earnings, some analysts say Barclays will struggle to meet its profit targets unless it deepens cuts at its securities unit.

"There's a new sheriff in town and he's got the board's backing to make sweeping changes," said analyst Sandy Chen at Cenkos Securities in London. "We have long advocated an aggressive pruning of the investment bank. The time for this, it appears, is now."

The board, led by deputy chairman Michael Rake, decided at a meeting two weeks ago to remove Mr Jenkins after the non-executive directors said his changes were not happening fast enough, sources said.

"It became clear to all of us that a new set of skills were required for the period ahead," Barclays said in a statement. "New leadership is required to accelerate the pace of execution going forward", with Mr McFarlane "ideally qualified in this respect".

Mr McFarlane, 68, replaced Mr David Walker, 75, with the bank mired in misconduct scandals. By becoming executive chairman, he is assuming a similar role to what he held at Aviva, where he helped restructure the UK insurer, replacing most of the board and boosting returns.

Mr McFarlane said a new CEO will need to be familiar with investment banking but that he is in no rush for a replacement.

The bank's shares jumped as much as 3.5 per cent, the most since May 20. The stock has risen about 7 per cent this year.

Under Mr Jenkins, the bank pledged to eliminate 7,000 jobs at the investment division, cut the division's share of group assets to 30 per cent from about 50 per cent and set up a bad bank to sell assets including complex derivatives.

His efforts failed to have a quick impact, with the securities unit reporting a 2.7 per cent return on equity, a measure of profitability, las t year, down from 8.2 per cent a year earlier and below Mr Jenkins' group target of 12 per cent. The unit is the bank's least profitable.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on July 09, 2015, with the headline 'Barclays sacks CEO over slow pace of change'. Print Edition | Subscribe