RPT-UPDATE 2-Barclays picks Aviva's McFarlane as chairman to oversee revamp

(Repeats to additional subscribers)

* McFarlane to replace Walker as Barclays chairman in April

* Aviva says Montague to take its chairman seat

* Scot McFarlane a banking veteran, former CEO ofAustralia's ANZ

* Barclays shares up 1.4 pct, Aviva down 0.8 percent

By Steve Slater and Matt Scuffham

LONDON, Sept 12 (Reuters) - Barclays has appointedbanking and insurance veteran John McFarlane as its new chairmanto oversee the British bank's efforts to stamp out wrongdoingand improve performance.

McFarlane, a Scot, will step down as chairman of Britishinsurer Aviva and take the Barclays hot seat in April.

Aviva said Adrian Montague would take over as its chairman,also in April. He has previously been chairman of UK lifeinsurer Friends Provident and British Energy.

Barclays has been searching for a strong replacement forDavid Walker, who is 74 and been chairman since November 2012.With Chief Executive Antony Jenkins he has tried to improveculture after a series of scandals - including the mis-sellingof loan insurance and the attempted manipulation of Liborinterest rates - raised concern about lax standards.

McFarlane, 67, was chief executive of Australia and NewZealand Banking Group (ANZ) for 10 years until 2007 andhas been Aviva's chairman since July 2012, making some toughdecisions to turn around an underperforming business.

He took over the full-time running of the insurer in May2012 after an investor revolt saw off CEO Andrew Moss.

McFarlane delivered a damning assessment of Moss's fiveyears in charge and vowed "to regain the respect of shareholdersby eliminating the discount in our share price". He appointedMark Wilson as chief executive, who has overseen an improvementin the insurer's performance.

"My perception is he's down to earth and a pretty toughoperator with a lot of international experience. It looks like agood choice," said Mike Trippitt, analyst at Numis Securities.

Barclays is in the midst of its own turnaround, as CEOJenkins tries to improve profitability by shrinking the bank toslash costs and axe underperforming units and reduce itsreliance on investment banking.

McFarlane last year told Reuters there were not many peoplewho could run a big British bank due to the increased regulatorydemands on the role.

"There are probably less than a dozen individuals globallythat have the right experience to do it. I do think that achairman of a bank should ideally have relevant bankingexperience because of the complexity involved," he said.

Barclays shares were up 1.4 percent by 0920 GMT,outperforming a flat European bank index. Aviva shareswere down 0.8 percent.

BANKING PAST

Most of McFarlane's career has been in banking; he joinedANZ from Standard Chartered, where he was an executivedirector from 1993 to 1997. He worked for Citigroup and itspredecessor firms for 18 years until 1993, including as head ofits UK and Ireland business for three years.

He began his career in manufacturing with Ford inBritain, after studying at the University of Edinburgh and theCranfield School of Management in Bedford.

McFarlane will also step down as chairman of transport firmFirstGroup. He was also a non-executive director atRoyal Bank of Scotland after its bailout in October 2008until 2012.

He will be paid 800,000 pounds a year as Barclays chairman,including 100,000 in its shares, and is not eligible for anybonus. He is expected to work the equivalent of four days aweek.

Montague, 66, has been on Aviva's board since January 2013.He is a qualified solicitor and formerly partner at Linklaters &Paines.

(Additional reporting by Simon Jessop; Editing by Pravin Char)