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Barclays names John McFarlane new chairman Barclays names John McFarlane new chairman
(about 9 hours later)
Barclays today announced John McFarlane as the bank’s chairman, having lured him away from insurer Aviva. Barclays shares got a shot in the arm after the bank lured John McFarlane from Aviva to become its new chairman on a day of musical chairs at the top of Britain’s financial services industry.
One of Scotland’s most-successful businessman, McFarlane, pictured, ran Australian bank ANZ for 10 years and more recently won plaudits in the City for the turnaround job he has been overseeing at the life insurer. The move immediately led to speculation over what the Scot’s appointment means for Barclays top executives – Mr McFarlane oversaw fully 20 board changes during just over two years overseeing a turnaround at the insurer.
McFarlane will join as Barclays seeks to arrest a 25 per cent decline in its share price over the last year and stabilise a shrinking investment bank that has been struggling of late. On the same day, Aviva announced Sir Adrian Montague, the chairman of venture capitalist 3i and its senior independent director, would take on Mr McFarlane’s old job while Virgin Money hired Glen Moreno to replace Sir David Clementi at the head of its board, although he won’t join the board until next year. It is not yet clear what impact that move will have on the challenger bank’s hotly-anticipated flotation plans. Virgin Money would only say that “market will dictate” its next move.
He will also have to grapple with significant regulatory hurdles. The bank has opted to fight attempts by US watchdogs to fine it over claims that it allowed “predatory”, high-frequency traders into its US “dark pool” share-trading exchange without other investors knowing. Mr McFarlane will replace Sir David Walker at Barclays, who had said he would serve for “up to three years” upon taking over from Marcus Agius with the bank in turmoil.
It is also involved in the global forex-fixing probe, an investigation that is creating real concern among banks on both side of the Atlantic. Unusually for a senior director, Sir David, now 74, took on no other directorships as he sought to stabilise a bank reeling from the firestorm created by the Libor interest rate fixing scandal.
McFarlane — who joins the board in January — will replace Sir David Walker as chairman in April. He has worked closely with Antony Jenkins, hired as successor to Bob Diamond, who had like Mr Agius quit in the wake of the Libor affair.
Sir David, 74, was appointed in August 2012 with the bank reeling from the Libor investigation which led to the departures of chief executive Bob Diamond and his chairman, Marcus Agius. But while they have stabilised the bank, it remains in tangled in a string of regulatory investigations with its shares having fallen by 16 per cent in the last year, as much thanks to its under-performing investment bank as its continuing difficulties with watchdogs.
A governance specialist, he has overseen the appointments of Antony Jenkins as chief executive and Tushar Morzaria, the former JPMorgan investment banker as finance director, whom many see as a natural successor. The division has been struggling with a decline in revenues from the once lucrative fixed income, currencies and commodities businesses (FICC), although that is an industry- wide problem.
McFarlane will step down from his chairman roles at both Aviva and transport company FirstGroup. He will hand the reins at Aviva over to Sir Adrian Montague, the chairman of venture capitalist 3i who already serves as its senior independent director. He will, however, retain two non-executive directorships after joining Barclays. Mr McFarlane played an integral role in the departure of the unpopular Andrew Moss as chief executive of Aviva and ran the business himself for more than six months before appointing Mark Wilson as chief executive.
McFarlane said: “I am looking forward enormously to joining the Barclays board and to working with my fellow non-executive directors,  Antony Jenkins and his leadership  team to deliver the strategy that Barclays has committed to and which I fully support.” By contrast to the consensual Sir David, he has a reputation for ruthlessness with very clear ideas on how things ought to be at the businesses he has overseen. He is also planning to surrender his chairmanship of transport operator FirstGroup to devote himself to the job at Barclays, although he will keep on another couple of non-executive directorships.
Aviva said McFarlane had alerted its board that he was seeking a return to banking some time ago, kicking its succession process into high gear. Although he issued a statement expressing support for Mr Jenkins, he could still make life interesting at Barclays if things don’t pick up soon, particularly with its highly-regarded finance director Tushar Morzaria having a strong following in the City.  
Ian Gordon, analyst at Investec said: “I’m not AJ’s greatest fan. Nothing against him but output so far has underwhelmed for him. Tushar seems very sensible, very smooth, much more ‘in control’ vis-à-vis the regulatory agenda etc, but even he isn’t currently setting the world on fire in terms of magicking up some better FICC numbers. How could he?! But what would he do differently to AJ? Most people have good things to say about McFarlane.”
That is not least because Aviva’s shares came close to doubling from a low of 280p to nearly 530p yesterday under his tenure.
Announcing the hiring of Mr Moreno, who has been a senior independent director at Lloyds and was chairman of UKFI, which manages the state’s stakes in banking, Virgin also said underling first-half profits before one-offs of £59.7m, up from £13.1m the year before. Income rose 28.3 percent to £210m.
Its chief executive Jayne-Anne Gadhia said the bank was close to announcing a partnership with an insurance provider to enable it to offer a full suite of financial products through branches.