Bank revolving door spins faster

Barclays management changes after their chief takes the post: Deanna Oppenheimer

Bank revolving door spins faster

By Jane Croft

Published: November 13 2006 02:00 | Last updated: November 13 2006 02:00

By next spring, more than a third of the Barclays senior executive management team will be relatively new to the bank.

The revolving door at Barclays' Canary Wharf headquarters, which began with the appointment of Deanna Oppenheimer in August 2005, has drawn attention as it spins round ever faster.

ADVERTISEMENT

The UK's third-largest bank is in the middle of a rapid transformation under John Varley as the Barclays chief executive attempts to make the bank a force capable of competing with its rivals expanding round the world.

Mr Varley, who took over as chief executive in 2004, wants to graft the competitive global ethos and performance measures of Barclays Capital on to the underperforming parts of the business, such as the retail bank.

He has spoken openly of the need to raise the "metabolic rate" of Barclays. While Mr Varley is generally liked by investors, his boardroom changes and importing of executives at senior levels have raised eyebrows.

Critically, his management changes have removed or sidelined people once seen as rising stars, such as David Roberts, former head of international banking, and Roger Davis, former UK head of banking. Both were once considered contenders for the chief executive's position and left this year.

Gary Hoffman, who was head of Barclaycard and another contender for the top job, has been moved to be deputy chairman in charge of social responsibility.

Naguib Kheraj, the well-respected finance director, will also leave next April to be replaced by Chris Lucas, partner at PwC, after the youthful Mr Kheraj concluded that he wanted a new challenge outside the bank.

The upheavals have also led to a flood of departures at lower management levels - particularly at the UK retail bank.

They have instead found senior roles at a variety of consumer finance operators and investment banks.

Mike Rogers, managing director of UK retail banking at Barclays, left this year to become chief executive of Liverpool Victoria, the friendly society. Wai Au, chief operating officer at the UK retail bank, has also left.

Gary Jennison, former managing director of the branch network at Barclays, left to become chief executive of Secure Trust bank, owned by Arbuthnot, the investment bank.

Steve Clutton, former finance chief of Barclays' UK retail banking division, left to join IG Group, the spread betting firm as finance director.

Peter Crook, ex-managing director of Barclaycard's consumer finance division, left last year to become head of Provident Financial's home credit operation.

Tiku Patel, who was managing director at Barclays Premier banking, has joined Experian, the information company, as chief operating officer.

As existing staff left, so Barclays began aggressively hiring new staff from rivals such as Citigroup and Washington Mutual. By next April, eight of its 20-strong top executive management team - or 40 per cent - will be made up of executives who joined the bank only in the past 12 to 18 months.

The highest profile executive hiring is Frits Seegers, who was hired from Citigroup to be chief executive of global retail and commercial banking.

Some observers see the appointment of Mr Seegers as a move to counterbalance the power of Bob Diamond, who runs the best performing parts of the Barclays empire - Barclays Capital, the investment bank, and BGI, its asset management business.

Deanna Oppenheimer joined from Washington Mutual as head of UK retail banking and Antony Jenkins was hired from Citigroup to Barclaycard.

Chris Grigg, group treasurer, joined from Goldman Sachs, where he was a partner, and Ahmed Khizer Khan, who joined as chief executive of new markets including India, arrived from Citibank.

Marcus Agius, from Lazard, replaces Matt Barrett as the new chairman in January and Steve Booysen, chief executive of Absa, joined with Barclays' acquisition of Absa last year.

In turn, the new hires have also recruited for their teams - sometimes turning to their old employers for key staff. Since his arrival in July, Frits Seegers is understood to have hired up to 20 staff from Citigroup including Ahmed Khizer Khan.

Deanna Oppenheimer has hired former Washington Mutual staff such as Mike Amato, who is now chief distribution and product officer in UK retail banking.

At least 40 other senior executives have joined Barclays from other banks such as UBS, Citigroup, Morgan Stanley and Julius Baer since August 2005.

Many have been recruited into the wealth management division, where Barclays is investing £375m over three years developing the business and has hired 370 staff so far this year.

Simon Maugham, banks analyst at Blue Oak Capital, says: "I think it is unusual for a bank to go through change of this scope and indeed the continuing nature of it all begs the question, when is it going to end?"

Ian Gordon, Dresdner Kleinwort analyst, adds: "I guess we cannot object to an influx of new talent . . . I would struggle to say all the management changes have been because Barclays has suddenly found a pool of untapped talent from outside."

The rate of change is unusual because Barclays has continued reporting strong profit and is expected to report another solid pre-close trading statement on November 28.

One banking consultant said: "It is clear the executives want the rest of the bank to perform at the same level as Barclays Capital and Barclays Global Investors, otherwise earnings will be diluted."

Barclays says its latest employee survey showed an improvement in staff satisfaction. Staff turnover in the UK rose in 2005 to 20.4 per cent against 19.4 per cent in 2004.

It says: "We have 118,000 people worldwide and we do not think there has been an abnormal amount of change. We are an ambitious organisation and we believe our investment has paid off.

"The morale in the bank is very good and the new hires bring fresh ideas and perspectives, which therefore creates more opportunities."

Other banks such as HBOS and Lloyds TSB have also seen some changes over the past 18 months.

But these organisations have not seen the scale of the changes as at Barclays over such a relatively short period. Many of the new hires at Barclays are also new to the UK market.

However, analysts will not have long to wait before they can see whether the scale of changes at Barclays has the desired effect of lifting performance in sluggish parts of the group.