Barclays’ 'Bad Bank' Chief To Step Down

By Mark Kleinman, City Editor

The executive in charge of a Barclays division housing billions of pounds of underperforming assets is to step down.

Sky News has learnt that Eric Bommensath, who was previously the co-head of Barclays' investment banking operation, is to retire later this year.

His departure, which is expected to be announced on Wednesday, will come eight months after he was placed in charge of Barclays Non-Core, a new unit set up to manage £110bn of risk-weighted assets (RWAs).

The creation of the division was a core element of a plan unveiled last year by Antony Jenkins, Barclays' chief executive, to reshape the group's sprawling structure in an attempt to improve financial returns.

Since the 'bad bank' was set up, the level of RWAs inside it has been significantly reduced, to £88bn at Barclays' half-year results and £81bn at the end of the third quarter.

That figure will be lower still at the end of the first quarter of this year following the completion of the sale of Barclays' Spanish retail operations last week.

The sale incurred a substantial loss but underlined Mr Jenkins' determination to exert a firmer grip on operations which have failed to produce satisfactory results.

Mr Bommensath, who has been at Barclays for 17 years, is expected to be replaced by two other executives within the bank's non-core unit, John Mahon and Harry Harrison.

He is understood to have decided to leave after establishing a firm path for the division.

Barclays will be the last of the big UK lenders to report their results for 2014 when it announces its full-year earnings on March 3.

The bank's overall performance has been steadily improving under Mr Jenkins, who replaced Bob Diamond in the wake of the Libor rate-rigging scandal in the autumn of 2012.

However, it continues to face a number of regulatory headwinds, including a joint settlement with US, UK and Swiss authorities over systems and control failings in its foreign exchange-trading operations.

A number of other banks, including HSBC and Royal Bank of Scotland, paid more than £1bn under an agreement with the City watchdog last November, with Barclays expected to reach a settlement in the next two months.

For the first time, Barclays plans to publish its annual report, containing comprehensive disclosures on remuneration, on the same day as its annual results.

Barclays declined to comment on the planned changes to the leadership of its non-core division.

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