New Barclays CEO to Lead ‘Root and Branch Review’
Staff Writer, CNBC.com
Antony Jenkins, head of Barclays retail and business banking unit, has been appointed as chief executive of the bank, with a mandate to launch a root and branch review after a series of scandals rocked it to the core.
Jenkins was tipped as the leading internal candidate from an early stage, as his background in retail banking meant that he is relatively untainted from some of the allegations pointed at the bank’s investment banking division.
The latest allegations of wrongdoing came just hours before the announcement of his appointment on Thursday morning when it emerged that Barclays was under investigation by the U.K.’s Serious Fraud Office over payments made to its biggest shareholder, Qatar Holdings, during its 2008 capital raising. (Read More: Barclays in Fresh Criminal Probe)
Jenkins’ predecessor Bob Diamond quit after the bank paid a $450 million (290 million pounds) fine for the manipulation of the London interbank offered rate (explain this) — the benchmark rate on which much lending is based.
Together with other UK-based banks, Barclays has also faced criticism and hefty payouts over the mis-selling of payment protection insurance to consumers and interest rate swaps to small businesses.
Jenkins said in a statement: “We have made serious mistakes in recent years and clearly failed to keep pace with our stakeholders' expectations. We have an obligation to all of those stakeholders - customers, clients, shareholders, colleagues and broader society - and a unique opportunity to restore Barclays reputation by making it the "go to" bank in all of our chosen markets. That journey will take time, we have much to do, and I look forward to getting started immediately." (Read More: What Can Be Done to Restore UK Banks' Reputations?)
It is understood that Jenkins’ appointment has been approved by the U.K. Treasury and the Bank of England. The Central Bank Governor Mervyn King has admitted telling Barclays Chairman Marcus Agius that regulators had lost confidence in Bob Diamond, leading to his resignation.
Jenkins’ annual salary will be $1.7 million (£1.1 million), with an annual incentive award of up to 250 percent of salary – relatively modest compared to his predecessor’s controversial pay awards. His basic salary is close to a fifth smaller than Diamond’s.
Last year, Diamond received close to 18 million pounds in total through basic pay, share awards and relocation payments.
Jenkins will adopt a three-pronged approach to changing the bank over the next 3-5 years, sources at Barclays told CNBC. This will focus on stabilization after recent events, a fundamental root and branch review of the business, and restoring trust in the bank by examining its culture, practice and values.
He has been at the bank for more than three decades, and has been a member of the executive committee since 2009. He is known for being an “ideas man” who spearheaded the growth of Barclaycard as well as introducing contactless payment.
Jenkins will join newly appointed Chairman David Walker, who will replace Agius on October 31. Agius also resigned following the Libor scandal.
The latest SFO investigation is related to payments made to Qatar for “advisory services” around Barclays 2008 capital raising - the deal previously perceived as the magic bullet which helped restore the bank’s capital base at height of the 2008 credit crisis.
Chris Lucas, finance director of Barclays, and three others, believed to include Roger Jenkins, former head of tax advisory, are under investigation by the U.K. regulator, the Financial Services Authority.
The SFO investigation, which will use as its starting point material gathered by the FSA, will cover the conduct of the entire bank rather than individual investors.