One of the most senior executives at Barclays, Roger Davis, resigned yesterday, midway through his turnaround plan for the bank's struggling high street branch operation. The 49-year-old denied City speculation that he had been involved in a power struggle with boardroom colleague Bob Diamond and said he was looking for "new challenges". He is leaving after realising he would never get the top job at the banking group and wants to be chief executive elsewhere.
He leaves Barclays on 1 April 2006 and under his contract will be entitled to as much as 12 months' salary of £500,000 plus a bonus of as much again provided he does not a get a job before April 2007.
Barclays shares slid 0.5p to 603p. Analysts expressed concern that the highly regarded executive was leaving in the middle of a strategy to rejuvenate the high street branches, which have been failing to increase profits. The UK business bank, which Mr Davis also runs, has been growing more quickly, with profits up 20% in the first half of 2005 to £726m - more than half of the £1.2bn profit of the British arm. A recent trading statement suggested the performance of the branch business was improving.
Analysts at Fox-Pitt Kelton said: "Roger Davis had been tipped to one day take over as head of Barclays. He was head of the UK bank and was less than a third of a way through the challenge of turning the business around. To comment that he is looking for new challenges is puzzling to say the least."
Another analyst said there had been rumours that Mr Davis was involved in a political battle with Mr Diamond, head of investment banking, who was recently appointed to the board with the title of president. The rumours have circulated since part of the UK business banking operation was transferred to Barclays Capital, the investment banking arm run by Mr Diamond.
Mr Davis was adamant that there had been no dispute. "I wanted to redesign the business bank. It was all my idea," he said. "Bob Diamond has been a good friend and colleague and supportive of me in everything I've done at Barclays."
Mr Davis started his career at Barclays with BZW in Asia. He began running the combined retail and business banking arms of the UK operations two years ago. "It was not the top job but a good job," Mr Davis said. But he added: "My long-term goal is to be chief executive of a plc - a FTSE 100 type of job."
Mr Davis, who sits on the board, is not being replaced directly as head of UK retail and business banking. Instead Gary Hoffman, the board member who runs Barclaycard, is being promoted to chairman of UK banking and chairman of Barclaycard. Three new chief executive positions below board level are being created to run Barclaycard, the high street bank and business banking - positions which existed two years ago before a previous restructuring.
Barclaycard is to be run by Antony Jenkins hired from Citigroup; the business bank is to be run by Barclays veteran Peter Harvey while UK retail banking is to be run by Deanna Oppenheimer, the American banker who arrived in September.
John Varley, the Barclays chief executive, said: "I thank [Roger] sincerely. I will miss his energy, enthusiasm and leadership skills. Roger is committed to ensuring a seamless succession to the new team that he helped put in place."
Backstory
A former soldier, Roger Davis is not a typical banker. The son of a major-general, he went to boarding school before going to Sandhurst and later to Oxford before joining the Royal Tank Regiment. His banking career began with Jardine Fleming where he was head of the Indian operations before being lured to BZW, the now defunct Barclays investment banking arm, in Hong Kong in 1996. Said to be something of a showman, he regards his main skill as being a motivator of people rather than a financier.