By Matthew Kochen,
Money and Investing Writer
After an internal and external candidate search that started back in July, Barclays Plc (NYSE: BCS) has sealed the deal with Jes Staley to become the new Chief Executive Officer of the major London based banking and financial services company.
In getting the nod from Barclay’s Chairman John McFarlane, Staley seeks a more successful run than his immediate predecessors.
Three years ago, Barclay CEO Robert Diamond was pressured to resign amid a scandal Barclays incurred from regulatory infractions.
Barclays was fined over $450 million by American and British regulators as a result of manipulating the Libor rate (one of the benchmarks banks use to determine the interest rates charged for interbank lending and borrowing) during the height of the financial crisis.
Between Diamond and now Staley, Antony Jenkins ran the show for Barclays until being fired in July.
During his reign, Barclays became stagnated, becoming as Chairman McFarlane said a, “cumbersome and bureaucratic” bank as well as stating Barclays had become very inefficient and in need of cost cutting.
Another key reason for Jenkins’ departure was his conflict with the board over the direction of the investment banking segment of Barclays.
Jenkins was of the opinion to decrease the focus on investment banking, leading to the current head of investment banking, Tom King, threatening to quit unless the existing direction was averted.
Seeking to solve these problems at Barclays, enter Jes Staley.
Aged 58 years old, Staley entered the financial industry via Bowdoin College, where he graduated cum laude with a degree in economics.
Since graduation, Staley has put in the time on Wall Street to be amongst the most seasoned veterans.
He joined Morgan Guaranty Trust Co. of New York back in 1980, one of the handful of institutions that would merge and be acquired to form the JP Morgan Chase (NYSE: JPM) that we all know today.
Jes Staley’s career at JP Morgan Chase spanned 34 years.
He got his first start at the position of head of corporate finance and general manager of the Brazilian part of the Latin American division.
From there he helped found JP Morgan’s equities businesses, running the Syndicate and Equity Capital Market groups.
He then rose to head of the Private Banking division in 1999, increasing profitability by roughly a multiple of three.
In 2001, he was promoted to chief executive of JP Morgan Asset Management.
He ran it until 2009, during which he grew the client assets from $605 billion to about $1.3 trillion.
After asset management, Staley rose to the highest position he would reach during his tenure with JP Morgan, becoming chief executive of the Investment Bank.
He maintained this position until 2013 when he left to become a managing partner of BlueMountain Capital as well as join the board of directors at UBS (NYSE: UBS).
Just prior to this departure, Staley was initially passed over by Barclays in favor of Antony Jenkins.
In picking Jes Staley, Barclays is choosing to pursue a new strategy.
Given the squabble from the previous CEO due to investment banking shrinkage, coupled with Staley’s experience and track record in this field, it seems obvious Barclays means to revamp its investment banking segment, bringing it back into focus.
Staley has many problems he will have to solve for Barclays, including navigating the back half of the bank’s three-year plan to cut 19,000 jobs, reducing $88.1 billion in non-core assets, the regulatory challenge of separating its domestic retail banking from other risky activities by a 2019 mandate, and reviving JP Morgan’s lagging wealth management segment.
Staley has not formally been announced as the new CEO of Barclays, as they first need approval from British regulators. The formal announcement is expected to come within the next two weeks.
A version of this article appeared in the Tuesday, October 20th print edition.
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