On Wednesday evening, the bank announced that it is being investigated by the Serious Fraud Office over payments made to its biggest shareholder, Qatar Holdings, during its 2008 capital raising. The announcement could have dragged down the shares much more if Jenkins’ appointment had not come out, according to analysts. (Read More: Barclays in Fresh Criminal Probe)
“We see the appointment as a positive in terms of removing some of the uncertainty relatively quickly, although the stock has been a strong performer in the last month and the announcement last night of the SFO probe will take some shine off,” analysts at Credit Suisse wrote in a research note. “In the very near term, we do not expect a significant share price reaction.”
Jenkins’ background in retail banking meant that he is relatively untainted from some of the allegations pointed at the bank’s investment banking division. It will also fuel speculation about Barclays refocusing on its retail banking business.
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.