Barclays’ top investment banker Throsby makes surprise exit

LONDON • Barclays plc CEO Jes Staley took direct control of the lender’s investment bank in a shake-up that led to the unexpected departure of Tim Throsby, one of his top lieutenants.

Throsby, head of the Barclays International division, “has decided to leave the company”, the London-based lender said in a statement on Wednesday, which gave little detail on the reason behind the exit.

Staley criticised lacklustre results at the investment bank, which has emerged as the focus of a tussle between the bank and activist investor Edward Bramson, who favours shrinking that business.

The investment bank’s return is “not yet where we need it to be”, Staley said in the statement.

He called the move a “delayering” that would bring “oversight and accountability for the performance of the Corporate and Investment Bank (CIB) much closer to me”.

While the move underscores Staley’s determination to keep the securities operation, it may fuel investor concerns of executives being stretched too thin.

“This move does increase the probability of a change in strategy,” said Fahed Kunwar, an analyst at Redburn.

“Given the strategic focus on the investment bank and the need to improve returns, the timing of this move is odd, as Throsby was most closely associated with the reallocation of capital and cost.”

Among other changes, Staley will become interim chief of Barclays Bank plc, the legal entity housing businesses outside British consumer banking.

Throsby, one of the executives Staley brought in from former employer JPMorgan Chase & Co, declined to comment when called by Bloomberg News.

His exit comes as the external environment for securities companies in Europe shows few signs of improvement after a torrid fourth quarter.

A week ago, UBS Group AG CEO Sergio Ermotti described conditions as the toughest in years and said the bank would slow hiring and deepen cost cuts.

The CIB has reported a lower return on equity than other units, though its trading results outpaced many European rivals in 2018.

However, as Throsby vowed to reignite the division’s “commercial zeal”, it took on more risks as well.

Last year, internal models failed to predict a series of trading losses at its investment bank.

Joe McGrath will be the investment bank’s head of global banking, which will include advisory, debt capital markets and equity capital markets.

Stephen Dainton, currently global head of equities, will act as interim global head of markets, the bank said.

In the meantime, Alistair Currie will be head of corporate banking. All three will report to Staley starting from April.

“The split into three distinct units looks interesting,” said Eric Moore, a fund manager at Miton Group in London who owns shares of UK banks including Barclays.

“The acceptance that they need to do better in the corporate and investment bank is good. And it is good that Staley has greater ownership of the issues.”

Ashok Vaswani, currently CEO of Barclays UK, will take on a newly created role as global head of consumer banking and payments.

Matt Hammerstein, currently head of retail lending, will be appointed as the new UK CEO.

The personnel moves come ahead of the installation of new chairman Nigel Higgins, who takes over from John McFarlane in May. — Bloomberg