Barclays investment bank chief quits as CEO Jes Staley seizes more control

The head of Barclays investment bank has resigned, with CEO Jes Staley bringing the unit under his control with the ambition to scale the business despite activist investor pressure to scale it back.

Tim Thorsby has quit as head of Barclays Corporate and Investment Bank (CIB), amid a swathe of leadership changes at the lender aimed at capitalising on its strengths as a diversified consumer and wholesale bank.

Moving forward, the CIB will be managed as three ‘distinct, though connected, units’, all of which will report directly to the Group CEO Jes Staley.

‘I believe we need a more granular execution focus on the businesses within the CIB if we are to drive those returns, in a reasonable timeframe, towards and above that cost of capital,’ Staley said.

‘And so I have decided to change the leadership model for that business, delayering the organisation in order to bring oversight and accountability for the performance of the investment bank much closer to me as group chief executive,’ he added.

Staley defies activist investor to scale back investment bank

Activist investor Ed Bramson, whose investment vehicle Sherborne Investors controls a 5.5% stake in Barclays, has been trying to build shareholder support to scale back the CIB unit.

But Staley has continued to fight back against the idea and has arguably proven Bramson wrong, with the unit recording better-than-expected results in 2018, producing a return on equity of just over 7%.

‘Competing in the top tier of global corporate and investment banking, enabled by our size, and commitment across asset classes, is important for Barclays’ future returns,’ Staley said. ‘And we demonstrably do compete in that top tier.’

Barclays CIB outperforms rivals

In the third quarter of last year, revenues at the banks’ equities and fixed income trading units rose by 35% and 10% year-on-year, outpacing most of its rivals.

However, the lender was unable to sustain that momentum in its fourth and final quarter of the year, with revenues at its fixed income trading operation sliding 6% year-on-year to £570 million.

But despite the slide, Barclays CIB still fared better than its European rivals, who all posted double-digit declines in 2018.

The leadership changes announced by the bank on Wednesday have been welcomed by investors, delivering another blow to Bramson's shake up plan, with Barclays share price up 1.46% to 155p.

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