Barclays Chief Executive Antony Jenkins will step down later this month after the bank's board decided he was "not the right person," chairman John McFarlane told CNBC.
McFarlane, will take over as executive chairman on July 17, as a search for a successor begins. He told CNBC after the news that Jenkins "hadn't done anything wrong... he's just not the right person to take us forward."
Shares in the bank rose as much as 3.2 percent following the news of Jenkins' departure.
McFarlane said that the the bank's board members had rated his chances of executing Barclays' new agenda as higher than Jenkins.
"He (Jenkins) was good at executing what we asked him to do at that time. What we are asking him to do now is different and the board believes that the probability of my executing is higher," McFarlane told CNBC.
He added that it was "perfectly obvious," there were a "number of issues" at Barclays.
"One is that it is a very clunky type of organization," McFarlane said.
"It's not fast-moving; it's not lean; it's not agile—it is with customers, but it isn't in terms of execution. Our efficiency levels are low, our capital is being used in the wrong way and we really need to deal with that and very quickly and bring it forward."
Jenkins, who took over in 2012 after a scandal over the bank's fixing of the key Libor interest rate led to the resignation of predecessor Bob Diamond, has overseen tough times at the bank.
In May, Barclays was one of a number of banks that pleaded guilty to trying to manipulate foreign exchange markets. It agreed to pay $2.4 billion in fines.
"The board recognizes the contribution made by Antony Jenkins as chief executive over the past three years in incredibly difficult circumstances for the group, and is extremely grateful to him in bringing the company to a much stronger position," the bank's statement on Wednesday said.
"The situation he inherited would have challenged anyone facing the same issues."
Jenkins will take home £2.4 million ($3.7 million) plus benefits, the bank said, and is eligible for a 2015 bonus.
Filippo Alloatti, senior credit analyst at Hermes Fund Managers, told CNBC that the bank's shares could come under a "little under pressure" as the timing of the announcement was unexpected.
"But in the medium-term, as long as they put the right man in place—and I believe the finance director would be a very well-suited successor to Mr Jenkins—then this has a very positive medium-term potential," he said on Wednesday. Group Finance director Tushar Morzaria joined the bank in October 2013 from JPMorgan Chase.
The bank's interim results are due on 29 July 2015.
Correction: This article has been updated to reflect that Jenkins will take home £2.4 million ($3.7 million) plus benefits.