Last checked at 
* Appointment to signal renewed focus on investment bank
* Staley ran JPMorgan's investment bank, asset management
* Role has been vacant since Jenkins was axed in July
* Shares dip 2.6 pct in weak banking sector (Adds statement from Barclays, updates shares)
By Lawrence Delevingne and Sinead Cruise
NEW YORK/LONDON, Oct 13 (Reuters) - British bank BarclaysPLC is close to naming former JPMorgan Chase banker Jes Staley as chief executive, signalling a renewed focuson an investment banking division that has been pared back overthe past three years.
Barclays offered the position to Staley, currently managingpartner of U.S. hedge fund firm BlueMountain Capital Management,and he accepted the offer, a person with knowledge of thesituation told Reuters.
Boston-born James 'Jes' Staley, 58, ran JPMorgan'sinvestment bank and asset management business and had been atthe bank for 34 years before leaving in early 2013 to joinBlueMountain. He made the shortlist when Barclays last lookedfor a CEO three years ago.
"His appointment will indicate a greater commitment to theIB (investment bank), but then Barclays' profitability problemsare linked to the IB and not the traditional bank," said ChintanJoshi, analyst at Nomura.
Previous CEO Antony Jenkins was fired in July after losingthe support of non-executive directors in a clash over style andthe pace of the bank's turnaround.
Jenkins set about reducing the importance of the investmentbank after a series of scandals, while changes in regulationalso made many trading activities unprofitable. It was intendedas a clear break from his predecessor Bob Diamond, anotherAmerican investment banker.
Investors and analysts said Staley should improve morale andset a clear strategy for the investment bank after years ofuncertainty, but they warned he should not build it back upaggressively.
"At first sight he would not appear to be the person todownsize the IB, but maybe that is too much of a snap reaction,"said Richard Marwood, senior investment manager at AxaInvestment Managers.
A top 20 Barclays investor, who asked not to be named, said:"We don't have a problem with them retaining some investmentbanking activities, it just needs to be done in a rational way... given the volatility and reputational risk that comes withthe investment bank, the bar needs to be set very high."
Barclays shares were down 2.6 percent at 249.9 pence by 1340GMT, underperforming a 2 percent fall by Europe's bank index.
CHOPPY WATERS
Any appointment would also still depend on Staley gettingapproval from Britain's financial regulators.
The appointment is expected to be announced in the next twoweeks, according to the Financial Times, which first reportedthe expected hiring.
A Bank of England spokeswoman said on Tuesday no-one hadbeen approved yet as new Barclays CEO.
Barclays said it noted the speculation regarding Staley butthe process of appointing a new CEO "has not yet concluded".
"If this change is approved, it could signal that UK andU.S. regulators are comfortable with the renewed ascendancy ofinvestment banking," said Jim Antos, analyst at MizuhoSecurities Asia in Hong Kong.
Staley, a keen yachtsman, joined JPMorgan in 1979 and spenteight years in its Brazilian business. He helped found itsequities business and later became CEO of asset management.
He was long seen as a possible successor to JPMorgan CEOJamie Dimon, but was sidelined after a management reshuffle in2012 and moved to BlueMountain a year later.
Staley will face a number of challenges at Barclays.
The bank is just over halfway through a three-year plan tocut 19,000 jobs, including 7,000 in the investment bank, and itstill faces litigation issues.
It needs to cut costs to improve returns, is trying to winddown 57 billion pounds of non-core assets, and needs to separateits domestic retail bank from more risky activities by 2019 tomeet new regulations. Industry sources have said it has had moredifficulty finalising its "ring-fencing" plans than rivals.
Staley, who also previously ran JPMorgan's private banking,may also look to fix Barclays' underperforming wealth managementbusiness.
Barclays Chairman John McFarlane, who has been running thebank since Jenkins' exit, has also put more emphasis back on theinvestment bank and this week said European investment banksshould consider merging to create a regional champion to competewith U.S. rivals, which are gaining market share.
An appointment of Staley would see a second former JPMorganinvestment bank boss running a British bank, after StandardChartered this year picked Bill Winters as its new CEO.
Barclays' Finance Director Tushar Morzaria is another formerJPMorgan executive, showing the growing influence of the U.S.bank's alumni in London.
(Writing by Steve Slater; Additional reporting by SangameswaranS, Aurindom Mukherjee and Lawrence White; Editing by Mark Potterand Keith Weir)
