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LONDON (Alliance News) - Barclays PLC Friday ended months of speculation about its next chairman, saying David Walker will be replaced by John McFarlane at the company's annual general meeting next year.
The bank has lured McFarlane from his current chairmanships at insurer Aviva PLC and transport company FirstGroup PLC.
McFarlane, 67, will want to ensure that Chief Executive Antony Jenkins' revamped strategy, which was unveiled in May, runs smoothly. The plans include the shrinking of Barclays' investment bank, as the group looks to allocate capital more efficiently and boost returns. The new chairman will also join Jenkins in trying to restore Barclays' reputation as it continues to grapple with a number of legacy issues, including litigation, a regulatory probe into the foreign exchange market, and scrutiny of remuneration policies in the banking sector.
In addition, McFarlane is taking charge during a period of uncertainty around the regulatory backdrop for banks, particularly on capital and leverage requirements. There is still discussion going on about the implementation of plans in the UK to introduce a ring-fence around the deposits of people and small businesses in order to separate them from the banks' investment banking and wholesale activities.
Media have been speculating for months about who would replace Walker. Names that have been cited included Mike Rake, the Barclays deputy chairman who is also president of the Confederation of British Industry, the former Financial Times Chief Executive Rona Fairhead, who was recently appointed head of the BBC Trust, and Howard Davies, the former Treasury mandarin who has been set the task of resolving Britain?s airports strategy.
Walker was made chair of Barclays in September 2012, tasked with helping repair the bank's tarnished image in the wake of its fines for rigging the Libor interbank borrowing rate. However, Barclays continued to be hit with regulatory issues and fines, and Walker was criticised earlier in the year when the bank raised bonuses despite reporting falling profits and big job cuts.
Walker was expected to leave Barclays next summer, having been given the role for three years. Barclays hasn't set the date yet for its 2015 AGM, but the 2014 meeting took place in April.
Barclays shares were Friday trading 1.9% higher at 229.67 pence per share, while Aviva were trading down 0.3% at 529.50p per share. FirstGroup shares were quoted 0.6% lower at 122.45p per share share.
MacFarlane will step down from the chairman positions at Aviva and FirstGroup in April and July 2015, respectively, said Barclays in a statement Friday. He will become a non-executive director of Barclays on January 1, ahead of taking the chairman role.
"Barclays is grateful to Aviva and FirstGroup for agreeing to release Mr McFarlane to take on this important role. The appointment has been approved by the Prudential Regulation Authority and the Financial Conduct Authority," Barclays said in its announcement.
Aviva said Adrian Montague will become its non-executive chairman when McFarlane steps down at its annual general meeting. Montague joined the insurer's board in January 2013 and became a senior executive director in May 2013. He is currently non-executive chairman of 3i Group PLC.
FirstGroup, meanwhile, said Senior Independent Director Drummond Hall has begun the process to identify a strong replacement for McFarlane. "It is unfortunate that John will be unable to see his tenure through at FirstGroup, but we all understand the importance of the role at Barclays he has been asked to take on."
McFarlane will remain a non-executive director of Westfield Holdings Ltd and Old Oak Holdings.
"McFarlane has a strong track record as a CEO and subsequently as a Chairman. He brings extensive experience of investment, corporate and retail banking, as well as insurance, strategy, risk and cultural change," Barclays said in its statement.
Before his time at Aviva, McFarlane served as chief executive of Australia and New Zealand Banking Group from 1997 to 2007, and before this was a group executive director at Standard Chartered PLC. He has also held senior positions at Citicorp, and non-executive directorships at Royal Bank of Scotland Group PLC and Capital Radio.
"I am delighted that Barclays has appointed John McFarlane to succeed me as Chairman. We are making good progress toward the delivery of our strategic objectives and I have every confidence that John will work very successfully with Antony Jenkins in leading this great bank through the next phase of that journey," said outgoing Chairman Walker.
As a non-executive director of Barclays, McFarlane will receive an annual fee of GBP250,000, said Barclays, GBP30,000 of which will be in the form of Barclays shares. When he becomes Chairman, he will get GBP800,000 a year, including the annual fee he will receive as a non-executive director. Barclays said GBP100,000 of the annual fee received as chairman will be in the form of Barclays shares.
The bank also said McFarlane's time commitment to Barclays is expected to be 80% of a full-time role.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
Additional reporting by Samuel Agini; samagini@alliancenews.com; @SamuelAgini
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