Antony Jenkins, former head of retail and business arm, vows to restore bank’s reputation as it faces SFO inquiry
Barclays has appointed its head of retail and business banking Antony Jenkins as chief executive to replace Bob Diamond, who was forced out by the Libor fixing scandal.
The new chief executive, who comes from the “safer” retail side of the business, pledged to restore Barclays’ reputation, but his appointment comes as the Serious Fraud Office launches an investigation into payments made after the bank tapped Middle Eastern investors for emergency funds in 2008. Barclays shares dropped 1.45p to 184.9p.
The inquiry – which relates to the disclosure of fees paid to the sovereign investor Qatar Holding – represents the latest blow to Barclays. Both Diamond and chairman Marcus Agius quit after the bank was fined £290m by US and UK regulators for its role in the rate-rigging scandal in June.
Analysts at Investec said: “Given these investigations an external candidate may have been better for Barclays, though with a change of both chairman and CEO the continuity of an internal candidate has some benefits too.”
Overall, the reaction to Jenkins’ appointment in the City was positive. Jason Napier at Deutsche Bank described Jenkins as the “natural internal choice” for the top job.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: “The former head of Barclaycard appears untarnished by the Libor scandal, and given his group experience, provides something of a running start.”
While his arrival will refuel speculation of splitting the bank in two to separate risky investment banking from the safer retail business, Napier said: “We expect the bank to stick to its strategy of seeking to operate world leading retail and investment banking operations.” Jenkins himself described Barclays as a “universal bank,” but it seems likely that investment banking will be scaled back as new regulation kicks in.
Jenkins, who topped the list of internal candidates and began his career at Barclays as a graduate recruit at a South Kensington branch in 1983, takes the helm immediately. He joined the Barclays executive committee in November 2009. Before being promoted to head of retail and business banking, which generates 40% of group profits, he was chief executive of Barclaycard between 2006 and 2009. He rejoined the bank after working for Citigroup in London and New York for 16 years.
Jenkins, a 51-year-old marathon runner who has been described as the “nice guy” of banking, admitted that the bank had made “serious mistakes” in recent years and pledged major changes to Barclays’ culture.
In a memo to Barclays staff, he said: “Getting there will require nothing short of the transformation of how we operate the business.” While much of the work was already under way, he added: “We need to move faster, more boldly and be even more joined up in executing it.”
He told the Guardian: “Many things will have to change at Barclays, including compensation, across the group.” He pointed out that his basic annual salary of £1.1m was below the median for FTSE 100 chief executives.
His total pay package could be worth up to £8.61m. It includes an annual bonus worth up to 250% of salary, as well as shares worth up to 400% of salary under the bank’s long-term incentive plan and a pension worth a third of salary. The package is below that of his predecessor, who received £17m in pay, shares and perks last year.
A week after quitting in July, Diamond gave up £20m of share options he was entitled to. He had earned around £100m at the bank since 2006 when his pay was first disclosed.
Jenkins said: “We have an obligation to all stakeholders – customers, clients, shareholders, colleagues and broader society – and a unique opportunity to restore Barclays reputation by making it the ‘go to’ bank in all of our chosen markets. That journey will take time, we have much to do, and I look forward to getting started immediately.”
Outgoing chairman Agius said in a memo to staff that after interviewing shortlisted candidates the board’s decision to appoint Jenkins was unanimous.
Sir David Walker, Barclays’ chairman-elect who will take over from Agius in November, said: “The field of shortlisted candidates that I met was very strong, and it was clear that Antony was the outstanding choice. His track record, familiarity with the group and vision for the future are all highly compelling. I look forward to working with him closely to make that vision a reality.”