If you work at Barclays Capital, the worst has come to pass: Bob Diamond has gone (full resignation letter here). Neither Jerry Del Missier nor Rich Ricci are seen as viable replacements for him. Unless a new chief executive is hired externally, the Financial Times says the most likely replacement for Diamond is Antony Jenkins. Jenkins is a nice guy. But he's also a retail banker, with a retail banking background. Antony Jenkins is absolutely not an investment banker.
Suddenly, therefore, jobs at Barclays (Capital) look a lot less certain. Yesterday, we spoke to a senior BarCap banker who said everyone there was rooting for Bob: "We are all utterly united in the desire to keep Bob," he said. "Can't say it any other way. Not everyone likes him and everyone is v p*ssed off about what happened but he is universally seen as a force for good for us."
Diamond leaves BarCap in a position of vulnerability. Its cost base is, "bloated," said Investec analyst Ian Gordon in a note yesterday. Someone needs to take, "more radical action to address a bloated Barcap cost base to get closer to the Group’s unrealistic RoE aspirations," Gordon added.
Long term, it seems almost certain that pay at BarCap will fall further. The average member of code staff at Barclays earned £1.5m last year, vs £2.4m the year before. Even before Bob went, Barclays had promised to: "Realign financial distributions so that shareholders will in future be handed a greater share of rewards relative to Barclays employees in an attempt to avoid another damaging dispute over pay next year."
Jobs may go too. As Bob noted in his valedictory note, he was instrumental in building Barclays' investment banking business. Not all areas of that investment banking business may prove viable in their current form. Cash equities revenues are plummeting and Barclays lost share in the first quarter of this year. What comes next may not be pretty.