Australian could get Barclays job

ERIC JOHNSTON
Last updated 05:00 10/07/2012

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ANZ chief executive Mike Smith has emerged as a potential contender to replace former Barclays boss Bob Diamond as the British banking major embarks on an accelerated global search for a CEO and chairman in the wake of the Libor rate-fixing scandal.

Diamond, as well as Barclays chairman Marcus Agius, resigned from the company last week as part of efforts to defuse claims the bank manipulated key interest rates to bolster profits during the 2008 financial crisis.

The Wall Street Journal reported Smith as one of several external candidates the board of the British bank was likely to examine to take the top job.

Since joining ANZ in October 2007, Smith has been on a rolling 12-month contract, which means either he or the bank can terminate the contract with up to a year's notice. However, if Smith walked away from the bank today, he would stand to lose nearly NZ$6.4 million in short and long-term incentives.

While there is no evidence Smith has been approached, the sudden exit of the well regarded bank executive would represent a major setback for ANZ, which is starting to gain momentum from its aggressive Asian push.

The report, which quoted unnamed sources close to Barclays, said the British bank had appointed global executive-search firm Spencer Stuart to find a chief executive.

The Barclays board is expected to receive a list of candidates within two weeks, with the aim of filling the post within three months. An Australian-based representative of Spencer Stuart could not be reached yesterday. Smith is on leave.

A spokesman for ANZ declined to comment on the report.

One Australian banker said it was little surprise Smith's name had emerged in the global search, given his extensive banking experience. Australian banks are highly regarded among their global peers for emerging from the global financial crisis relatively unscathed.

But a fund manager questioned whether the Asia-focused Smith would be the right fit for Barclays. Last year, Barclays generated just 4 per cent of its income from Asia. This compared with 49 per cent from Britain and 19 per cent from the US. The bank also has sizeable Middle East and European operations.

The current head of Barclays' retail and small-business division, Antony Jenkins, is widely seen as the primary internal candidate to succeed Diamond.

However, many believe the Barclays board is leaning towards an external candidate to help push through a cultural change programme in the wake of the Libor scandal.

In terms of the balance sheet, Barclays is nearly three times the size of ANZ. Last year, Barclays reported the equivalent of NZ$11.4 billion in profit, compared with ANZ's NZ$6.85b.

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- BusinessDay.com.au

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