Story by The Wall Street Journal
Barclays PLC Chief Executive Antony Jenkins was ousted from the bank Wednesday after its board decided fresh blood is needed after three lackluster years with Mr. Jenkins at the helm.
The revolt was led by the bank’s nonexecutive directors, who were growing impatient with the huge British bank’s progress under Mr. Jenkins, according to bank officials. Barclays said that newly arrived Chairman John McFarlane would serve as executive chairman until a permanent replacement is found. Mr. Jenkins “was incredibly professional” when he was told last week he would have to leave, Mr. McFarlane said Wednesday. Mr. Jenkins in a statement said he was proud of his time at the bank.
Shares in Barclays rallied about 3% in response to the news in early trading in London.
The shake-up means Barclays is the fourth major European bank to change its CEO this year, following Deutsche Bank AG, Standard Chartered PLC and Credit Suisse Group AG. The clean out of the executive suites at some of the world’s biggest banks is a reflection of mounting investor and boardroom frustration with banks’ stubbornly low stock prices and sluggish progress at overhauling the sprawling institutions. A tougher regulatory environment and damaging investigations have weighed on banks since the financial crisis.
However, the next Barclays CEO will inherit a raft of challenges. Parts of its foreign-exchange and equities businesses are being probed by regulators and prosecutors. A long-running investigation into its dealings with a Qatari investment vehicle is also still hanging over the bank.
Within the group, there are still question marks over the ultimate size of its investment bank, as well as the strategic importance of businesses outside the U.K. such as Barclays Africa. The bank is also in the process of part-separating its U.K. retail bank from investment banking to meet new “ringfencing” rules.
Mr. Jenkins stepped into the top job at the lender nearly three years ago after former CEO Bob Diamond abruptly left amid a scandal over the bank’s attempted rigging of interest rate benchmarks. During Mr. Jenkins’s tenure, he shed staff, shrunk Barclays’s investment bank and improved the group’s capital strength. But the multistage strategy went in fits and starts, and many investors, analysts and staff failed to fully warm to Mr. Jenkins as a leader.
His main focus was ending the bank’s freewheeling cowboy culture and instilling a more conservative, staid approach. His focus on making amends for Barclays’s past sins earned Mr. Jenkins the nickname St. Antony among some staff and investors.
Rumblings from the bank’s nonexecutive directors about a need for a new CEO reached a high pitch at an annual off-site board meeting two weeks ago, Mr. McFarlane said Wednesday. Led by Michael Rake, the bank’s senior independent director, the directors felt that “a different catalyst, a different person running it was urgently required,” Mr. McFarlane said. It was Mr. Rake who, three years ago, helped tap Mr. Jenkins to become CEO.
“It became clear to all of us that new set of skills were required for the period ahead,” Mr. Rake said. The final decision was reached by the bank’s board on Tuesday.
Mr. Jenkins’s departure wasn’t entirely unexpected. But few expected it to be so sudden and uncloaked in any language that might make it appear Mr. Jenkins had decided to step down of his own volition. Since starting as CEO in August 2012, the quiet, mild-mannered Mr. Jenkins struck many investors, analysts and staff as wooden in his personality and lacking the professional expertise to oversee Barclays.
A lifelong retail banker, Mr. Jenkins encountered a cultural chasm when he sought to make changes to Barclays’s investment bank in his first months on the job. The unit had been Barclays’s main growth engine under Mr. Diamond but was slow to adapt to post-financial crisis rules that made many of its activities less profitable. Some investment bankers and traders bristled at Mr. Jenkins’s attempts to cut their pay and change their culture. His message to staff in early 2013 was that they should leave if they didn’t like the changes.
Despite the tough talk, Mr. Jenkins was slow to cut jobs and reduce assets in the unit, and Barclays soon lagged behind rivals in reshaping its business.
Among analysts, he had a reputation for speaking in business jargon and relying on Finance Director Tushar Morzaria to answer any tough questions on numbers. A member of Britain’s House of Lords once lampooned Mr. Jenkins for speaking like a management consultant.
The entry of Mr. McFarlane as chairman in April paved the way for Mr. Jenkins to go. Known as “Mack the Knife” for his approach to taking on tough turnarounds and cutting costs, Mr. McFarlane vowed to shareholders that month that he would speed up the bank’s restructuring.
On Wednesday he said the strategy’s execution lacked decisiveness. Top managers had become frustrated by bureaucracy and felt a lack of freedom in carrying out their jobs, Mr. McFarlane said.
He said the bank was “not in a massive rush” to find a replacement for Mr. Jenkins. The ideal candidate wouldn’t necessarily have to have run an investment bank, but should have a good familiarity with the businesses and geographies of Barclays, he said.
Possible candidates include Mr. Morzaria, analysts said.
“The announcement has come as a surprise this morning but not completely unexpected with returns from the investment banking division still disappointing,” said David Smith, co-manager of Henderson High Income fund, a Barclays shareholder. “The chairman comes with a good reputation and I would back him in his decision,” he said.
Mr. Jenkins said he is “very proud of the significant progress” made by the bank since he started as CEO in the summer of 2012, including changes to its culture that he helped to oversee.