IFR Editor-at-large Keith Mullin
(*Correction appended)
In fact, back in July 2012, I’d said “I don’t think it’ll be too long before Rich Ricci follows Diamond and del Missier out of the door”. That wasn’t particularly prophetic; I reckoned the writing was already on the wall even before Antony Jenkins was appointed to the group CEO slot.
While Jenkins continues to make positive comments about the importance of investment banking to the group, clearing out as much of Diamond’s legacy as he could as quickly as was practicable was always going to be near the top of his agenda. The departure of Tom Kalaris, head of wealth management and Americas executive chairman, similarly was not exactly earth-shattering news.
Diamond had hired Kalaris, an 18-year JP Morgan veteran, way back in 1996 as president of BZW in the US and he remained a close Diamond confidant.
From a group perspective, I’d say Barclays is probably in a better place without Ricci and Kalaris.
In the immediate wake of Diamond’s departure, Jenkins needed Ricci at the helm of the monolithic money-spinning CIB division to avoid key-man risk (something I alluded to last September) if he were to walk. Ricci’s CIB management re-org in October eased concerns in that respect at the same time as it became clear that Eric Bommensath and Tom King were CIB heirs apparent. Their elevation gave Ricci a much clearer exit strategy – or perhaps better put gave Jenkins a clearer exit strategy for Ricci.
Re-casting
In that re-org, Bommensath had been tapped to head up the newly combined global markets business (FICC and equities) while Tom King – at the time head of EMEA investment banking and co-head of global corporate finance and M&A and whom I’d noted in October had been singled out for greatness – was named head of investment banking pending Skip McGee’s move to head up Americas CIB.
From that much neater solution, it was much easier for Jenkins to push them up to co-CEOs of CIB. McGee’s position is also strengthened as he takes over responsibility for all group activities in the Americas, which Jenkins re-iterated today is key to the group. Jenkins’ comment today about wanting to delayer the organisation, “creating a closer day-to-day relationship and clearer line of sight for myself into the business”, sounded pretty sensible.
In Bommensath and King, the CEO has gone for the classic trader/banker duopoly that seems to be all the rage in investment banking these days – Deutsche Bank and Credit Suisse among others recently adopted this set-up. Beneath the veneer of the co-CEO structure, Bommensath and King will keep control of their respective trading and banking fiefdoms.
It’s worth noting that Jenkins has put two M&A bankers onto his executive committee against one trader; interesting in that in 2012, the trading businesses generated £9.4bn, some *80% of the investment bank’s total revenue; investment banking was responsible for just 18%.
When, on taking over as CEO, Jenkins split his old retail role into two and appointed Valerie Soranno Keating (CEO of Barclaycard) and Ashok Vaswani (CEO of Retail and Business Banking) to the group ExCom, I had become concerned that the inner circle was overly stacked with retail bankers, which given the importance of the investment bank to group earnings looked like an unfortunate mismatch. The group ExCom does look a lot more balanced now.
From a group perspective, I’d say Barclays is probably in a better place without Ricci and Kalaris. That’s not remotely intended to be a personal sleight on either of them or their achievements; but sometimes you’ve just got to move on.
(*CORRECTION: The trading businesses generated some 80% of the investment bank’s total revenue; not 90% as seem in an earlier version)
