Barclays boss ready to end seven-year tenure

Barclays was on the verge of a new era today as the controversial tenure of chief executive-turned-chairman Matt Barrett draws to a close.

Mr Barrett, 62, leaves the UK’s third largest bank on New Year’s Day to be replaced as chairman by Lazard veteran Marcus Agius, one of the leading deal-makers in the City of London.

It brings to an end a colourful seven years for the bank with the well-respected Mr Barrett set to be remembered as much for his gaffes as his leadership.

Company accounts show that Mr Barrett earned £704,000 (€1.04m) in 2005 compared with more than £3m (€4.7m) in 2003, his last full year as chief executive. He sold shares in Barclays worth £6.5m (€9.6m) earlier this month.

Mr Barrett joined Barclays as chief executive in October 1999 following the departure of Martin Taylor. However, the Irish-Canadian was second choice as the new boss of Barclays and was only appointed after Mike O’Neill quit almost as soon as he took office due to an irregular heartbeat.

Mr Barrett was relatively unknown at the time – he was chairman of Bank of Montreal – but that was soon to change after it emerged that semi-nude pictures of his former wife, the model Anne Marie Sten, had appeared on the internet.

Further controversy was to follow when in October 2003 he told MPs on the Treasury Select Committee that he did not use a credit card because they were “too expensive”.

It was seen as an admission that credit cards do not offer good value to customers – a spectacular slip given the millions of people who use Barclaycard.

Mr Barrett’s elevation to chairman in September 2004 also attracted adverse publicity as it was deemed to be against good corporate governance for a chief executive to move up to chairman. It was feared that such chairmen would be too dominant and too resistant to change.

However, despite the hiccups, Mr Barrett has steered Barclays through a period of sustained growth and success.

Analysts said he instilled renewed self-confidence at the bank while John Varley, his successor as chief executive, described his leadership as “inspirational”.

Barclays shares are around 65% higher than they were when he arrived in 1999 and last year the bank posted record profits of £5.28bn (€4.9bn) compared with £2.46bn (3.67bn) in 1999.

Central to the success has been the development of global businesses such as investment bank Barclays Capital and fund management group Barclays Global Investors, both headed by American Bob Diamond.

Mr Barrett also moved to improve business in the UK and oversaw the £5.3bn (€7.9bn) takeover of the Woolwich. However, the UK arm has remained sluggish amid growing levels of bad debt and faltering consumer confidence.

Since becoming chairman Mr Barrett has drifted out of the public eye with the focus now on Mr Varley, Mr Diamond and the incoming Mr Agius.

Mr Agius has developed a reputation of one of the City’s leading investment bankers in more than three decades at Lazard and his appointment as Barclays chairman rekindled speculation that a takeover could be on the horizon.

Earlier this month Merrill Lynch said Bank of America could be preparing a bid worth up to £60bn (€89.5bn).