Coverage: Ex-JPMorgan banker touted for Barclays’ CEO position

Jes Staley, a former JPMorgan Chase & Co. investment banker, is touted to be the next CEO of Barclays as the bank continues to be rebound from a period of uncertainty.

Staley’s appointment could prove troublesome for the UK lender, according to New York Times reporter Landon Thomas, but it could also give a much-needed jolt to Barclays within the banking community.

Martin Arnold and Patrick Jenkins of The Financial Times broke the news of Staley’s impending appointment:

Barclays plans to appoint Jes Staley as its new chief executive, turning to the former JPMorgan investment banker to lead the UK lender through a period of hefty restructuring and strategic uncertainty.

Mr Staley’s appointment is expected to be announced in the next two weeks, providing it is approved by regulators, said two people familiar with the matter. Barclays declined to comment.

One person close to the process said a shortlist of two had been narrowed to Mr Staley in recent days. The person said Barclays was braced for a dramatic change of approach compared with the regime led until the summer by retail banker Antony Jenkins.

“Winding down an investment bank with a big American investment banker in charge of the group is going to be challenging,” the person said.

The 58-year-old American will join from Blue Mountain Capital, the US hedge fund he joined in early 2013 after a more than three-decade career at JPMorgan.

Thomas of The New York Times described how appointing Staley would not be an uncontroversial decision for Barclays:

Tapping Mr. Staley, a career investment banker who has worked at a hedge fund for the past two years, would appear to be a controversial choice, given the many run-ins that Barclays has had with regulators over its risky banking style — along with the fact that he is an American.

Three years ago, the bank’s board, under severe public pressure from British regulators for the bank’s role in the interest-rate-fixing scandal, forced its chief executive at the time, Robert E. Diamond Jr., to leave the bank.

Mr. Diamond was a hard-charging investment banker, trained in the United States, who, in building the bank up to become one of the largest in the world, had instilled within it a Wall Street-style culture that rewarded high risk with high compensation.

Mr. Diamond’s successor, Antony Jenkins, was the polar opposite: a mild-mannered Briton whose corporate successes were in the bank’s consumer division. Promising to change the way the bank did business, Mr. Jenkins laid off hundreds of traders and investment bankers.

But a turnaround proved elusive and Mr. Jenkins was forced out in July.

Mr. Staley, 58, spent much of his career at JPMorgan, rising from junior investment banking jobs in the bank’s offices in Latin America to lead JPMorgan’s huge investment bank.

Max Colchester and Robin Sidel of The Wall Street Journal explained how this isn’t Staley’s first time being looked at by Barclays:

This is the second time Mr. Staley is talking with Barclays about the top job. The first time, he lost out to Mr. Jenkins, a longtime Barclays insider, who took the helm at the bank in August 2012.

“I think the Barclays conversations ultimately helped me define what I was really after,” Mr. Staley said in a 2013 interview with The Wall Street Journal when he left J.P. Morgan.

Barclays’s big retail presence will be new territory for Mr. Staley. Like other banks, Barclays is navigating big technological changes as its customer base increasingly moves away from physical branches to embrace mobile and online banking methods.

The bank posted a sharp rise in profit for the second quarter, but the results masked sluggish results in key areas. Revenue at the investment bank was flat, and profit fell in retail and corporate banking. Mr. McFarlane said the bank would retain capital and hold its dividend steady, and shed unwanted assets more quickly to get growing more quickly.

If Mr. Staley gets the nod, it would be the second time in five years that Barclays is turning to a U.S. investment banker to revive its fortunes—the first being former CEO Bob Diamond. It also marks the latest J.P. Morgan alumni to find a top job at a British bank.

Former J.P. Morgan executive Bill Winters was named chief executive of Standard Chartered PLC earlier this year. Other former J.P. Morgan executives now run credit-card company Visa Inc.; payments processor First Data Corp.; and PNC Financial Services Group Inc., one of the nation’s largest regional banks.

Other names on Barclays’s short list of potential candidates included Morgan Stanley executive Colm Kelleher and Barclays’s recently appointed chief operating officer, Jonathan Moulds, people familiar with the matter said.

Stephen Morris and Michael J Moore of Bloomberg explained what Barclays’ chairman John McFarlane was looking for in a new CEO:

While boosting revenue at Barclays is a major focus, McFarlane also has pledged to press on with cost cuts and divestitures as he seeks to shore up returns and double the share price over the next three to four years. Its investment bank has been plagued by the weakest return on equity, a measure of profitability, of all four units. It’s essential for the firm’s next CEO to have experience in that type of business because Jenkins “found it difficult to deal with” shrinking the division, McFarlane has said.

Other European lenders also have appointed new CEOs this year, with Tidjane Thiam taking the helm at Switzerland’s Credit Suisse Group AG and Bill Winters replacing Peter Sands at Standard Chartered Plc. At Deutsche Bank AG, John Cryan took over as co-CEO with Juergen Fitschen after the departure of Anshu Jain.

In firing Jenkins, McFarlane repeated the same tough stance he took at U.K. insurer Aviva Plc three years earlier. Aviva’s share price jumped more than 80 percent under him, with his approach to job cuts and cost reductions earning him the unwanted nickname “Mack the Knife.”