Antony Jenkins faces reputational battle as Barclays opts for safe pair of hands

Barclays named its retail and business banking boss Antony Jenkins as its new chief executive yesterday, in the hope of drawing a line under boardroom turmoil.

The appointment of Jenkins, whose achievements include dramatically enhancing Barclaycard’s performance, came 24 hours after the latest reputational blow for the group.

It was revealed on Wednesday that the Serious Fraud Office is investigating payments made between Barclays and its Middle Eastern investors Qatar Holdings as part of a multi-billion pound capital-raising by the British bank at the height of the financial crisis in 2008. Jenkins, who returned to the company from US financial giant Citigroup six years ago, admitted yesterday that Barclays had “made serious mistakes in recent years and clearly failed to keep pace with our stakeholders’ expectations”.

He added that the bank had a “talented and engaged staff”, but warned that cleaning up the bank’s reputation “will take time, we have much to do, and I look forward to getting started immediately”.

His predecessor Bob Diamond and outgoing chairman Marcus Agius both stepped down in the wake of £290 million of fines by the Financial Services Authority and American regulators for the bank’s manipulation of the key London Interbank Offered Rate (Libor).

The new chief executive, who was also responsible for Barclays Africa, seems to have gained an edge on internal and external rivals seeking to replace the flamboyant but controversial Diamond through a low-key manner and extensive experience of the retail business.

Agius, shortly to give way to City grandee Sir David Walker as chairman, praised Jenkins’ “intimate knowledge of Barclays’ portfolio garnered over three years on the group executive committee”.

Walker, the chairman-designate who was strongly involved in the hunt for a new chief executive, said: “His track record, familiarity with the group and vision for the future are all highly compelling.”

The City’s initial reaction was that the new boss had a strong record in global retail banking, which would be helpful if the strategy was to return the bank more to its high street banking roots.

But some analysts and fund managers were concerned at Jenkins’ lack of investment banking expertise, a key engine for profits growth at Barclays during Diamond’s tenure. They also cited the immense challenges the new man faces in repairing the reputational damage.

Mike Trippitt, banking guru at Oriel Securities, said: “He’s a very capable guy. I think the fact that he’s come up the ranks in the retail and commercial world means he’ll take a very fresh view of the investment bank.”

Trippitt said it was highly

unlikely Barclays would kill off its investment banking arm,

Barcap, which contributed

£2.3 billion to group profits in the first six months of this year alone.