At last. A universal bank – Barclays – has appointed a CEO, Antony Jenkins, from a retail banking background.
Jenkins’ track record at Barclaycard makes favourable reading.
As CEO, he can prove that a background in investment banking is not a pre-requisite to hold the top job.
And in keeping with the ‘new normal’ back to basics or safety first era of banking, a safe pair of hands is exactly what Barclays needs.
His retail banking background also fits in perfectly with Barclays more traditional role as a Quaker-formed conservative and cautious lender.
A number of less than kind commentators have commented upon a lack of personal charisma; lacking star-quality said one observer; unexciting said another.
Barclays has probably had its fair share of excitement and charisma for the short-to-medium term.
Jenkins’ retail banking unit contributed almost one-half of group profits in 2011 compared with 46% from the bank’s investment banking division.
Barclays is an excellent example of a strong and profitable bank and is a very good example of a successful universal bank.
In the six months to 30 June, Barclays posted an adjusted profit before tax up 13% to £4.323bn with improvements of 15% at Jenkins’ Retail and Business Banking unit; 11% in Corporate and Investment Banking and 38% in Wealth and Investment Management, demonstrating the strength of its universal banking model.
The Barcap unit has shown an ability to cut its costs (down by 12% in fiscal 2011 and by a further 3% in the first half of 2012 with revenues 4% up).
Barclays’ loans to deposit ratio continued to move in the right direction (improving to 111% from 118% in 2011).
Barclays’ adjusted cost-income ratio also improved in the first half, to 61% (2011: 64%).
Looking ahead, revenue will remain under pressure but Barclays is well placed to make further market share gains while Jenkins’ focus on expenses is likely to result in further progress in cutting costs.
A number of outstanding retail bankers around the world – arguably some with even stronger credentials than Jenkins – ought to be in the running the next time a job of similar stature becomes available.
If any headhunters are short of names top consider when the next CEO role becomes vacant, they might care to glance at some of the distinguished names shortlisted for the recent RBI Award for Retail Banker of the Year.
There is no guarantee – there never can be – that Jenkins will be a major success in his new role but the odds are that he will perform strongly.
There are also good odds to suggest that it will not be long before other major banks opt for a safe banks with a retail banking background when the top job is up for grabs.