Barclays Alters Investment Banking Shape
Barclays has rejigged its investment banking structure to create a devolved geographic management hierarchy and combine its fixed-income and equities businesses into a single markets unit.
Rich Ricci, head of the group’s corporate and investment bank, said former fixed-income boss Eric Bommensath would head the markets business, with equities boss Jerry Donini appointed chief operating officer.
Skip McGee – the most senior banker inherited with Barclays’ acquisition of the former Lehman Brothers in the U.S. – would become Americas chief executive. His opposite numbers in other regions would be Patrick Clackson in Europe, the Middle East and Africa, while in Asia, Robert Morrice, who already held a regional brief, would continue in that role.
“The evolution of client demands, and regulatory change, means that we need to provide a greater degree of regional leadership and co-ordination,” Mr Ricci wrote in a memo to staff.
Mr Ricci is the only one of the former “three musketeers” remaining at Barclays’ investment bank. The chief executive, Bob Diamond, and the chief operating officer, Jerry del Missier, resigned in the wake of the bank’s £290 million settlement with regulators over its involvement in trying to manipulate Libor benchmark borrowing rates.
Bankers said the management revamp – particularly the elevation of Mr McGee – would help calm any jitters among the former Lehman bankers in the U.S. caused by the departure of Mr Diamond and Mr del Missier, architects of the former Barclays Capital business.
The moves, which are accompanied by the creation of a 14-member executive committee for the combined corporate and investment bank, also strengthens management more broadly at a time of profound change for the investment banking industry, particularly regulatory pressures on the business.
This week, the EU-appointed Liikanen panel recommended that banks in Europe should be forced to ringfence most of their trading assets into separate subsidiaries. For Barclays, the ringfence would add to the capital and funding inefficiencies that are expected to result from a UK ringfencing arrangement of retail banking proposed by the government-appointed Vickers Commission last year.
Since Antony Jenkins, previously Barclays’ retail banking boss, took over as group chief executive, there has been a general expectation among analysts and investors that he would retrench from Mr Diamond’s investment banking ambitions.
So far, however, he has sought to stabilize the franchise, signaling his commitment to the business and to Mr Ricci. Mr Jenkins has promised a detailed strategic review of the whole group in the first quarter of next year.
In the meantime, Mr Ricci – who had been widely expected to leave with his two former colleagues – has been busy launching his own review of business operations and ethics within his unit under the so-called Project Mango.
Among the other appointments announced in Mr Ricci’s memo, Tom King is to be made head of Barclays’ investment banking advisory business, elevated from a European role to succeed Mr McGee. John Winter – who had earlier moved from the investment bank to head Barclays’ corporate bank – will join the executive committee.
Three senior staff - foreign exchange expert Ivan Ritossa, global distribution boss Guglielmo Sartori di Borgoricco and treasury executive Iain Abrahams – are leaving.