JPM JP Morgan Chase and Co

By Max Colchester 

Barclays PLC is preparing to name former J.P. Morgan Chase & Co. executive Jes Staley as its next CEO, as the British institution turns to an American investment banker to lead it out of a rut.

The appointment, which is still subject to regulatory approval, could be made in the coming weeks, a person familiar with the matter said. It follows a three-month search led by Executive Chairman John Mcfarlane after the ouster of its former leader, Anthony Jenkins, in July over concerns about lackluster performance.

The choice signals an important change of direction at the bank. Mr. Jenkins had led a strategy to make Barclays less reliant on its investment- banking operations, cutting thousands of jobs at what was once its profit engine after a series of scandals and declining returns troubled investors and regulators.

A decision to appoint a veteran investment banker like Mr. Staley signals a reconsideration of that retreat.

Barclays is one of a number of European banks that is scaling back operations under new leadership at a time when American rivals have regained their footing after the financial crisis and are looking to grow. Mr. McFarlane rued that mismatch in July, saying U.S. banks "are the only ones that really claim to be global and successful."

Although his first name is James, Mr. Staley, 58 years old, is known as "Jes" to his colleagues and friends. He worked his way up the ladder over more than three decades at J.P. Morgan, rising to run its asset-management unit before taking over the reins of J.P. Morgan's investment bank in 2009.

He left J.P. Morgan in 2013 to join BlueMountain Capital Management LLC. The hedge fund had bet against J.P. Morgan in a large derivative trade amassed in early 2012 by a trader for the bank nicknamed the "London Whale," at one point scoring gains of about $30 million, according to people familiar with the trades. BlueMountain later helped the bank exit some of its money-losing positions.

Mr. Staley acquired a stake in BlueMountain when he joined the firm. It isn't clear whether he will be forced to sell that stake if he gets the Barclays job. A spokesman for BlueMountain declined to comment. He also holds a board seat at Swiss banking giant UBS Group AG.

Barclays's plans to name Mr. Staley as CEO were reported earlier by the Financial Times.

This is second time Mr. Staley is talking with Barclays about the top job. The first time, he lost out to Mr. Jenkins, a longtime Barclays insider, who took the helm at the bank in August 2012.

"I think the Barclays conversations ultimately helped me define what I was really after," Mr. Staley said in a 2013 interview with The Wall Street Journal when he left J.P. Morgan.

Barclays's big retail presence will be new territory for Mr. Staley. Like other banks, Barclays is navigating technological changes as its customer base moves away from physical branches to embrace mobile and online methods of banking.

The bank posted a sharp rise in profit for the second quarter, but the results masked sluggish results in key areas. Revenue at the investment bank was flat, and profit fell in retail and corporate banking. Mr. McFarlane said the bank would retain capital and hold its dividend steady, and shed unwanted assets to get growing more quickly.

If Mr. Staley gets the nod, it would be the second time in five years that Barclays has turned to a U.S. investment banker to revive its fortunes-- the first being former CEO Bob Diamond. It also marks the latest J.P. Morgan alumni to find a top job at a British bank.

Former J.P. Morgan executive Bill Winters was named chief executive of Standard Chartered PLC earlier this year. Other former J.P. Morgan executives now run credit-card company Visa Inc.; payments processor First Data Corp.; and PNC Financial Services Group Inc., one of the nation's largest regional banks.

Analysts expected the search for a new CEO to be completed by next year as Barclays sifted through potential candidates. But the bank's board was under pressure from regulators to ensure that Mr. Mcfarlane's tenure as executive chairman was brief, according to a person familiar with the matter.

Other names on the short list of potential CEO candidates include Morgan Stanley executive Colm Kelleher and Barclays' recently appointed chief operating officer Jonathan Moulds, people familiar with the matter said.

The pool of candidates capable of running complex global banks is small. Credit Suisse Group AG went outside the industry in March to hire Tidjane Thiam, then chief of U.K. insurer Prudential PLC, as its next CEO.

"Jes has had a long career in banking doing a lot more than the securities business," said Roy Smith, a professor at New York University and a former Goldman Sachs Group Inc. banker. "But that's a tough part of the Barclays' business for it to get right. Jes's experience at the top levels of J.P. Morgan can only help."

Justin Baer contributed to this article.

Write to Max Colchester at max.colchester@wsj.com

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(END) Dow Jones Newswires

October 12, 2015 20:07 ET (00:07 GMT)

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