(Bloomberg) — Barclays Plc Chairman John McFarlane ousted Chief Executive Officer Antony Jenkins as the bank seeks to deepen cost cuts to bolster earnings. The shares rose.
McFarlane, who joined in April, will take over as executive chairman while the lender looks for a successor to Jenkins, 53, Barclays said in a statement on Wednesday. Jenkins, a former consumer banker, took over from Robert Diamond in 2012 after the bank was fined for manipulating benchmark interest rates.
Jenkins has eliminated thousands of jobs and sold assets after tougher capital regulations and rising fines undermined earnings. Still, some analysts have said the bank will struggle to meet its profitability targets unless it deepens cuts at the investment bank.
“There’s a new sheriff in town and he’s got the board’s backing to make sweeping changes,” said Sandy Chen, an analyst at Cenkos Securities Plc in London. “We have long advocated an aggressive pruning of the investment bank. The time for this, it appears, is now.”
McFarlane, 67, replaced 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 Plc, where he helped restructure the U.K. insurer, replacing most of the board and boosting returns.
Job Cuts?
McFarlane told BBC Radio in an interview on Wednesday that the bank isn’t efficient and may eliminate more jobs. Barclays remains committed to its international investment bank, he said.
The shares jumped as much as 3.3 percent, the most since May 20, and traded 3.1 percent higher at 8:30 a.m. in London. The stock has risen about 6.7 percent this year.
“It became clear to all of us that a new set of skills were required for the period ahead,” Barclays said in the statement. “New leadership is required to accelerate the pace of execution going forward,” with McFarlane “ideally qualified in this respect.”
Under Jenkins, the bank pledged to eliminate some 7,000 jobs at the investment bank, cut the division’s share of group assets to 30 percent from about 50 percent 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 percent return on equity, a measure of profitability, in 2014, down from 8.2 percent a year earlier and below Jenkins’s group target of 12 percent. That’s the least profitable of the bank’s four units.
“The CEO has not acted fast enough on restructuring non- core and capital generation and that the group is too bureaucratic,” said Joseph Dickerson, an analyst at Jefferies International Ltd. “While Mr McFarlane is CEO we would expect some acceleration of non-core rundown initiatives.”
Jenkins joins CEOs Anshu Jain and Brady Dougan who left Deutsche Bank AG and Credit Suisse Group AG respectively this year. The moves mark the passing of an era when trading profits paved the way to the top job at Europe’s largest banks.
The board “recognizes the contributions made by Antony Jenkins as chief executive over the past three years in incredibly difficult circumstances,” Barclays said.
Jenkins will receive 12 months’ salary, role-based pay and pension allowance as well as remain eligible for a bonus for 2015.
Jenkins just latest in succession of big bankers biting the dust
(Bloomberg) — Barclays Plc’s ouster of Chief Executive Officer Antony Jenkins adds to an unprecedented wave of management changes at Europe’s biggest banks as lenders seek leaders with a different set of skills to revive profit.
Barclays Chairman John McFarlane, who joined in April, will take over as executive chairman while the lender finds a successor to Jenkins, 53, the company said in a statement on Wednesday. Jenkins, a former consumer banker, took over from Robert Diamond in 2012 after the bank was fined for manipulating benchmark interest rates.
Barclays is among three of Europe’s largest lenders that replaced their CEOs this month. Below are some of the recent leadership changes:
* Deutsche Bank AG named supervisory board member John Cryan to replace its co-chief executive officers, Anshu Jain and Juergen Fitschen. Cryan, who started July 1, will run the firm with Fitschen, 66, until the latter departs next May. Cryan, 54, is the former finance chief at UBS Group AG.
* Credit Suisse Group AG appointed Tidjane Thiam, the former CEO of Prudential Plc, to replace CEO Brady Dougan, starting last week. Dougan had led the Zurich-based bank since 2007.
* Banco Bilbao Vizcaya Argentaria SA named Carlos Torres, its head of digital banking, as chief operating officer in May to replace Angel Cano in a wider revamp to accelerate the lender’s digital transformation.
* Standard Chartered Plc named former JPMorgan Chase & Co. investment bank co-chief Bill Winters to replace Peter Sands as CEO as it seeks to reverse faltering earnings growth and a slump in shares. Winters, 53, started in June. Chairman John Peace will leave in 2016.
* Royal Bank of Scotland Group Plc named former regulator Howard Davies to replace Philip Hampton, 61, as chairman starting Sept. 1, as the taxpayer-owned lender works to shrink its investment bank after seven straight annual losses. Davies, 64, was a former chairman of the now defunct U.K. Financial Services Authority.
* Credit Agricole SA chose Philippe Brassac, head of the federation of regional banks that controls Credit Agricole, to become CEO on May 20, replacing Jean-Paul Chifflet, who retired.
* Societe Generale SA, France’s second-largest bank, named former European Central Bank board member Lorenzo Bini Smaghi chairman, as it separated the post from that of CEO. Bini Smaghi, 58, took up the post at the end of May, Frederic Oudea relinquished the chairman role and kept the CEO title.
Antony Jenkins’s CV (from the World Economic Forum)
Degree in Philosophy, Politics and Economics, Oxford University; MBA, Cranfield Institute of Technology. 1983, completed the Barclays Management Development Programme and held various roles in retail and corporate banking; 1989, moved to Citibank, latterly as Executive Vice-President, Citibrands; 2006-09, CEO, Barclaycard; 2009-12, CEO, Barclays Retail and Business Banking; currently, Group Chief Executive, Barclays. Member of the Advisory Board: British American Business International; Business Authority of Singapore; Cranfield School of Management; Acumen Fund.
