Barclays Has Staley In Sights For Chief Exec

Barclays said it noted the speculation regarding Staley but the process of appointing a new CEO “has not yet concluded”.

After working for more than three decades at USA bank JPMorgan, the 58-year-old moved to hedge fund Blue Mountain Capital in 2013. Three years after an unhappy end was brought to the tenure of an American investment banker born in New England and educated at a small, private, liberal arts college in the state of Maine it seems that one Jes Staley is the favourite for the hot seat.

The first was to find a replacement for Mr Diamond who knew how to run an investment bank – which had, historically at least, generated most of the business’s profits.

The search for Mr Jenkins’ replacement has been led by executive chairman John McFarlane, who told a gathering of senior executives last week he was close to appointing a successor.

“Obviously he has credibility and comes from a very good organisation, but people are a bit perplexed by his investment banking background”.

He told Radio 4’s Today programme that there had previously been “big tensions” between the retail and investment divisions of the bank and investors were unhappy about Mr Jenkins’ attempts to change focus towards the retail side of the business.

Among Staley’s tasks as chief executive would be stripping out non-core assets at the bank and separating the investment bank from its retail banking operations. That scandal pushed the regulator to ease out the bank’s Chief Executive, Bob Diamond.

JP Morgan was one of the few banks in the world to sail through the credit crunch relatively unscathed (although it did suffer a mild case of dyspepsia after swallowing Bear Stearns). His appointment to the Canary Wharf bank is subject to regulatory approval. The company’s investment bank has been plagued by the weakest return on equity, a measure of profitability, of its four units.

Most scrutiny is on whether the new CEO, replacing Antony Jenkins after his ouster in July, will continue to scale back in investment banking, or build it back up.

Inventors and analysts said Staley might improve morale and would also set a clear strategy for the investment bank after years of uncertainty.

What the detached investment bank would lose is the strength the larger group can provide in the form of customer deposits.

Someone like Staley would be able to better identify the areas in IB where Barclays has a chance to compete, the areas it already covers well, and the talent it needs to hold on to.

McFarlane said in July European investment banks can no longer complete with their U.S. rivals, which are “the only ones that can claim to be global and successful”, because of greater competition and more stringent regulations across the region.