Barclays announced today the departure of its CEO, Antony Jenkins, saying its board had decided the bank needed “a change of leadership”. The bank is now in the search of a new chief executive to fill Mr Jenkins’ role. In the meantime, John McFarlane, Barclays’ chairman, will act as the Executive Chairman.
According to the press release by Barclays, the Non-Executive Directors led by Sir Michael Rake, Deputy Chairman and Senior Independent Director concluded that new leadership is required to accelerate the pace of execution going forward and that John McFarlane is ideally qualified in this respect until a permanent successor is appointed. This development does not signal any major change in strategy.
According to FT, that described the event as "Barclays fires Antony Jenkins as chief executive", said that Barclays used to generate the majority of its profits from its investment bank, which it expanded aggressively by acquiring the US assets of the failed Lehman Brothers estate during the financial crisis. But weighed down by regulation and slower market activity, the investment bank has become its worst performing division, sliding to a return on equity of only 2.9 per cent last year. Even worse, Barclays failed to benefit as much as its rivals from a rebound in fixed income trading activity in the first quarter. Its investment banking revenues grew only 2 per cent in the period, much less than rivals.
The Board said that "it recognizes the contribution made by Antony Jenkins as Chief Executive over the past three years in incredibly difficult circumstances for the Group, and is extremely grateful to him in bringing the company to a much stronger position. The situation he inherited would have challenged anyone facing the same issues. This continued a period of achievement as head of Barclaycard and our Retail and Business Banking businesses."
Members of the Group Executive Committee will now report to Mr McFarlane, who will work particularly closely with Tushar Morzaria, Group Finance Director.
Sir Michael Rake commented in the press release, “I reflected long and hard on the issue of Group leadership and discussed this with each of the Non-Executive Directors. Notwithstanding Antony’s significant achievements, it became clear to all of us that a new set of skills were required for the period ahead. This does not take away from our appreciation of Antony’s contribution at a critical time for the company.”
Mr McFarlane said in the release, “Whilst it is unfortunate that I have had little time to work with Antony, I respect and endorse the position of the Board in deciding that a change in leadership is required at this time. I would add my personal thanks for everything that Antony has done for us. He can be proud of his heritage, especially his excellent work on culture and values that we will continue. I wish him well.”
“Arriving at Barclays with a fresh perspective, it is evident that we have a standout brand with first-class retail, commercial and investment banking businesses. Nevertheless, we are leaving value on the table and a new approach is required. As a Group, if we aspire to bring shareholder returns forward, we need to be much more focused on what is attractive, what we are good at, and where we are good at it.”
“We therefore need to accelerate revenue, costs and capital performance. We also need to become more externally focused and deal with the internal bureaucracy by becoming leaner and more agile. I have experienced good results in dealing with these matters elsewhere,” he added.
Antony Jenkins said, “In the summer of 2012, I became Group Chief Executive at a particularly difficult time for Barclays. It is easy to forget just how bad things were three years ago both for our industry and even more so for us. I am very proud of the significant progress we have made since then. Our capital position is much stronger, our business model is more balanced, we are much more disciplined on cost management, we have made good progress in rebuilding our reputation and we are seen as a leader in the application of technology to our business. While the external environment has continued to be, and will remain, challenging the Group now has the resilience to overcome these challenges.”