Today, Jes Staley, the Chief Executive Officer of Barclays, took direct control of the under-pressure investment bank, ousting Tim Throsby, the the head of the business, in a shocking shake-up as he comes against an activist investor.
Staley is assuming the oversight of the three Corporate and Investment Bank (CIB) divisions namely: markets, corporate bank, and banking. He said that the move would help in the improvement of the overall returns to more than the 7 percent that was achieved last year.
Staley stated: “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.”
The Barclays exec faces pressure from Edward Bramson, an activist investor who is seeking to take a seat on the board of the company to try and force it to shrink the underperforming investment banking business that Staley has since championed.
A spokesperson for Barclays said that the departure of Throsby was “not linked in any way” to the pressure from the Sherborne investment vehicle of Bramson which owns a 5.5 percent stake in the bank.
Like Staley, Throsby also previosly worked at JP Morgan. He was hired in September 2016 following a six-month search for the vital job of overseeing the trading and advisory businesses of the bank.
Throsby then made senior hirings as Barclays tried to improve the returns at the unit, which have consistently lagged its more profitable credit card and retail banking businesses.
The return on tangible equity of 7 percent that was achieved by the investment bank of Barclays last year was considered as a step up from the previous year, however, it was still well short of its cost of capital and was below the longer-term goal that was set at 10 percent.
As part of the management shake-up, Barclays said that Joe McGrath will be running the global banking unit, Alistair Currie will head the corporate bank, and Stephen Dainton will serve as the interim head of global markets pending a search for a full time appointment.
In addition, Ashok Vaswani, the the head of the UK bank business of Barclays, will take on a new position as the global head of consumer banking and payments, bringing its profitable Barclaycard business and private bank under his control.