article: Hiring an investment banker is being seen by some analysts as a prelude to making a push back into that industry, one which the last holder of the top job, Antony Jenkins, was backing away from. But will an expansion into a sector dominated by a few American names be successful? After all, this won't be Barclays first drive into investment banking. During the deregulation of the City of London in the 1980s, Barclays bought stockbrokers De Zoete & Bevan, and Wedd Durlacher, a firm of stock market wholesalers. The resulting amalgamation was BZW. But its expansion was curtailed by then-chief executive Martin Taylor, who broke it up, selling its equity business, and retaining fixed income as a new company, Barclays Capital. He told investors it wasn't profitable, and the capital it sat on could be better used. The second expansion came under the leadership of a more recent figure at the bank: Bob Diamond. Starting at Barclays in 1996, he expanded its fixed income (bonds) and foreign exchange businesses. Barclays Capital became the lender's most profitable unit. But after the Libor scandal and his subsequent sacking, retail banker Antony Jenkins was promoted to chief executive and began cutting trading desks and the investment bank's salary bill. Mr Staley's posited arrival was not met jubilantly by investors. Barclays stock fell by as much as 3% following the news. A cloud around the way the industry is viewed in the UK may the reason, says Chirantan Barua, banking analyst at Bernstein. "Every time someone goes up on stage and says we are going to be a retail bank, the stock goes up," he says. "Because we hate investment banking. The other thing that happens is, to be profitable in investment banking you need scale and therefore capital. "Where are you going to get that from? That's why the reaction is negative. "Getting Jes in would mean moving the bank more towards an investment bank." For an enlarged investment bank to work, it will have to be big enough to take on competitors across the Atlantic. Big clients like hedge funds are less likely to trade with a bank that won't do complex lending, and picks and chooses business, Mr Barua says. "Having just the juicy part - that's not how it works." He estimates Barclays may need to find Â£4-5bn of extra capital, through raising it from investors or selling something. There are two alternative strategies for the investment bank, however. "They should really just carve out the investment bank and ship it back to the US where they bought most of it," says Cenkos Securities analyst Sandy Chen, referring to Mr Diamond's purchase of Lehman Brothers's north American assets, which be bought after the bank collapsed. US investment banks like Goldman Sachs and Morgan Stanley have a competitive advantage over their European peers in the form of friendlier regulators. What the detached investment bank would lose is the strength the larger group can provide in the form of customer deposits. This wad of cash - liquidity strength - allows the group to
summary: Barclays is close to appointing former JP Morgan banker James "Jes" Staley as its new chief executive.