Barclays PLC announced a shakeup at its investment bank on Thursday as the group tries to cut costs in a tough market and reduce risks to its reputation following the Libor scandal.
Rich Ricci, head of corporate and investment banking, said he needs to take action to prepare for more difficult times, while regulatory change and clients’ demands mean a greater degree of regional leadership and co-rdination is needed.
“We have taken market share through the turbulence of recent times, but with markets remaining challenging we must continue to control our own destiny,” Mr. Ricci said in a memo to staff seen by Reuters.
He will merge trading and distribution teams across fixed income, commodities and currencies (FICC) and equities into a new Markets business, which will be led by Eric Bommensath, who was previously head of FICC globally and trading in Europe.
Mr. Ricci has been reviewing the management structure since becoming sole head of the business in June, after co-head Jerry del Missier moved to become chief operating officer.
Top banks on Wall Street and in the City of London are stepping up efforts to cut costs and streamline operations as it becomes clear that a slump in trading activity in the last 18 months could continue as the euro zone crisis drags on, leaving banks overstaffed and unprofitable in many areas.
Barclays chief executive Antony Jenkins, who took over in July after previous boss Bob Diamond stepped down following the Libor interest rate rigging scandal, is expected to pare back parts of the investment bank. Mr. Diamond spent more than a decade building up the investment bank.
Mr. Jenkins has also said he will stop activities that pose “reputational risk” for the bank, and Mr. Ricci said last month that this could include parts of its tax advisory practices.
Barclays has been criticized for giving advice on complex structured tax schemes in the past, drawing fire from politicians over what they regard as tax avoidance.
Iain Abrahams, one of its specialists on complex tax issues, will leave the bank at the end of this year, Mr. Ricci said in Thursday’s memo.
Mr. Abrahams, who became vice-chairman of Barclays last year, worked with the group on treasury and tax issues and managed some property asset positions for the investment bank.
Mr. Ricci’s new top team is likely to have to make cuts across the business as Mr. Jenkins reviews all parts of his bank.
He named Jerry Donini, currently head of equities, as chief operating officer for corporate and investment banking and set up a new, single executive committee for the business.
Skip McGee will become chief executive of corporate and investment banking in the Americas, adding to his role as head of the advisory division.
Mr. McGee joined Barclays as part of its purchase of the U.S. business of Lehman Brothers in late 2008, and has been one of the longest serving top bankers on Wall Street.
Patrick Clackson will head the business in Europe, the Middle East and Asia, and Robert Morrice will remain as chief executive for Barclays in Asia Pacific.
Mr. Ricci said that in Europe the business will review its country strategies.
Also leaving at the end of the year are Ivan Ritossa, the investment bank head in Latin America, central and eastern Europe, Middle East and Africa, and Guglielmo Sartori di Borgoricco, head of distribution, Mr. Ricci said.
He said Tom King, head of advisory in Europe, will become head of global advisory next year and John Winter, head of corporate banking, will join the executive committee.Report Typo/Error