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LONDON (Alliance News) - Barclays PLC Wednesday is looking for a new chief executive to focus the FTSE 100 banking group's efforts on generating returns for shareholders, with the board calling time on Antony Jenkins' leadership and appointing Chairman John McFarlane in an executive capacity until a successor is found.
The news of Jenkins' departure sent shares in Barclays higher throughout trade on Wednesday morning and they were up 2.3% to 258.15 pence late morning, one of the best performers in the FTSE 100.
Jenkins, who is making way after almost three years in the role, has been responsible for returning the bank to health following the global financial crisis of 2007-09 and in the wake of the departure of his predecessor, Robert Diamond, who is widely known for building Barclays' investment banking division into a big name on Wall Street. Improving the culture at Barclays has been high on Jenkins' agenda, as has his strategy of cutting a reliance on the investment bank and shedding non-core assets in order to improve returns.
In a statement, Barclays said its non-executive directors, led by Michael Rake, who is deputy to McFarlane and the group's senior independent director, have decided that new leadership is required to "accelerate the pace of execution going forward". McFarlane, who became chairman in April after earning respect for his role in turning around FTSE 100 insurer Aviva PLC, said he endorsed the board's decision.
"The stock price today is exactly where it was six years ago, our dividend is low and flat. We need to, as quickly as we can, reward shareholders better than that," McFarlane told reporters in a conference call.
The decision to remove Jenkins from his post was made at a board meeting on Tuesday night, according to McFarlane, who told reporters of "rumblings of concern about the style of leadership" among non-executive directors as Barclays looks to move to the next stage of its journey, namely driving growth.
"We need to find more rapid revenue growth, we need our productivity to improve, we need our return on capital to accelerate," McFarlane told reporters.
Barclays said that Jenkins' departure does not signal any major change in strategy.
McFarlane said he is confident of finding a chief executive with a broad enough experience to run a business that encompasses personal, corporate and investment banking, credit cards and wealth management, across Europe, the Americas, Africa and Asia. Barclays will prioritise appointing the right person for the job over acting quickly, he said.
"Clearly it would be good to have somebody who has some familiarity with the investment banking business, because it's such an important part of the organisation," McFarlane said.
The change will be effective from July 17, when McFarlane retires as chairman of transport company FirstGroup PLC. In the meantime, McFarlane will work "particularly closely" with Tushar Morzaria, who succeeded Chris Lucas as Barclays' finance director in October 2013.
The chairman said the board has endorsed a plan for the investment banking business that was presented by Jenkins, Morzaria and divisional chief executive Thomas King.
"The investment bank last year last year suffered with a very weak performance. On the other hand, it's showed very strong performance in the first quarter, and that has continued. We're very happy with what's happening in the investment banking business," McFarlane said.
The chairman said that Barclays is "equally happy" with its cards and the personal banking business, though he was clear that one issue to resolve is that the group keeps "constraining growth with a heavy focus on capital".
McFarlane doesn't want to take the bank's focus away from building Barclays' capital strength. That remains a priority across the banking sector, as regulators continue to urge banks to become more resilient to the sort of shocks and losses incurred in the last crisis.
"We need to accelerate the capital generation, and get back on to investing in the growth businesses," the chairman said.
Barclays, which according to McFarlane plans to boost its capital base through internal measures, such as re-deploying capital from unproductive areas of the business, has given some parts of the group the freedom to grow at a faster rate within their own resources, with a view to the group finding "resource to accelerate" that growth later.
The chairman also wants to make Barclays "leaner and more agile" by reducing internal bureaucracy and eliminating the more clunky of the group's processes.
"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," McFarlane said.
The chairman paid tribute to Jenkins for his "brilliant" handling of Barclays as it recovered from the financial crisis, praising the way he went about changing the bank's culture.
Jenkins said he became chief executive at a "particularly difficult time" for Barclays, succeeding Robert Diamond in the wake of a GBP290 million fine over the Libor manipulation scandal in 2012, having previously led the Barclaycard payments business and the group's retail and business banking operations.
"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," Jenkins said.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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