Bob Diamond departure steadies Barclays shares

Published:  4 Jul at 9 AM

Shares at Barclays seem to have steadied following the announcement that Bob Diamond, the bank’s chief executive, is stepping down. According to analysts his resignation will help to take some of the heat currently focused on Barclays because of the libor-fixing scandal away.

In a statement Mr Diamond said he had taken the decision to step down because mounting external pressures risked damaging the franchise. Jerry del Missier, Barclays’ chief operating officer, is also leaving the bank. Both announcements saw an initial bounce in stock prices but shares ended at 167p, a drop of 1.4p.

Last Thursday, before the full extent of the libor-affair was realised, Barclays was trading at 196p per share. The latest developments have seen £3 billion wiped from the firm’s market value.

Other banks in the UK have also been struggling as worries increase that the affair will lead to tighter regulation. CMC Markets senior analyst Michael Hewson, said the latest scandal in the financial sector had produced an extremely toxic environment for banks to operate in. He warned that politicians wishing to deflect attention away from their own inadequacies and shortcomings could well use the Barclays situation as a political football.

A replacement for Mr Diamond is now being sought. Internally the most likely candidate for the top job is retail and business banking chief executive Antony Jenkins. From outside, names which have already been suggested include Bill Winters, formally co-head of investment banking at JP Morgan and Naguib Kheraj, former JP Morgan Cazenove boss.