British bank Barclays PLC (BARC.L) is close to naming former JPMorgan Chase (JPM.N) banker Jes Staley as chief executive, signalling a renewed focus on an investment banking division that has been pared back over the past three years.
Barclays offered the position to Staley, currently managing partner of U.S. hedge fund firm BlueMountain Capital Management, and he accepted the offer, a person with knowledge of the situation told Reuters on Monday.
Boston-born Staley, 58, ran JPMorgan's investment bank and asset management business and had been at the bank for 34 years before leaving in early 2013 to join BlueMountain. He made the shortlist when Barclays last looked for a CEO three years ago.
"His appointment will indicate a greater commitment to the IB (investment bank), but then Barclays' profitability problems are linked to the IB and not the traditional bank," said Chintan Joshi, analyst at Nomura.
Previous CEO Antony Jenkins was fired in July after losing the support of non-executive directors in a clash over style and the pace of the bank's turnaround.
Jenkins set about reducing the importance of the investment bank after a series of scandals, while changes in regulation also made many trading activities unprofitable. It was intended as a clear break from his predecessor Bob Diamond, another American investment banker.
Investors and analysts said Staley should improve morale and set a clear strategy for the investment bank after years of uncertainty, but they warned he should not build it back up aggressively.
"At first sight he would not appear to be the person to downsize the IB, but maybe that is too much of a snap reaction," said Richard Marwood, senior investment manager at Axa Investment Managers. He said reducing the size of the investment bank was still high on his wishlist.
A top 20 Barclays investor, who asked not to be named, said: "We don't have a problem with them retaining some investment banking activities, it just needs to be done in a rational way ... given the volatility and reputational risk that comes with the investment bank, the bar needs to be set very high."
Barclays shares were down 2.7 percent at 249.5 pence by 0845 GMT, underperforming a 2 percent fall by Europe's bank index.
No comments:
Post a Comment