Sky News has learnt that Sir Gerry Grimstone, who chairs Barclays’ investment bank and international arm, has informed boardroom colleagues that he does not want to be considered as a successor to John McFarlane.
The development, which comes hours before the bank’s annual general meeting, will surprise the City.
Sir Gerry, who will step down as chairman of the asset management group Standard Life Aberdeen next year, had been viewed as an obvious potential chairman of Barclays since joining its board as deputy chairman in 2016.
A source close to Barclays’ board said on Tuesday that Sir Gerry had decided to focus instead on chairing Barclays Bank plc, the group’s non-ring-fenced unit.
He is also a non-executive director on its holding company board.
Sir Gerry’s decision not to pursue the group chairmanship throws the race for one of the biggest jobs in British banking wide open.
At its AGM later on Tuesday, Mr McFarlane is expected to confirm that a search will get underway for his replacement in due course, although it is unclear whether he will be explicit about a date for his departure.
The search for a new chairman will be led by Crawford Gillies, who recently replaced Sir Gerry as Barclays’ senior independent director.
The handover of its chairmanship will come at an important time for Barclays, which has just become the first UK lender to formally separate its retail operations from its investment banking unit under reforms which come into effect next year.
Its first-quarter results showed some progress in its efforts to improve the performance of its troublesome investment bank.
That was welcome news for Jes Staley, Barclays’ chief executive, who has had to contend with the appearance on its share register of Edward Bramson, an activist investor, in recent weeks.
The bank has made vital progress in casting aside legacy millstones, announcing a $2bn (£1.4bn) settlement with the US Department of Justice for mis-selling mortgage-backed securities before the financial crisis.
It has also resolved uncertainty over the future of Mr Staley, who had been under investigation by the City and banking regulators over his treatment of a whistleblower in 2016.
He faces a seven-figure fine but has been allowed to keep his job.
Other legal hurdles to the group’s revival remain in the form of Serious Fraud Office charges against Barclays’ holding company and its main operating subsidiary, in relation to the emergency fundraisings which helped it avoid a state bailout in 2008.
The bank also faces a civil action from the financier Amanda Staveley, who is claiming huge damages in relation to the same fundraisings.
At its annual results, Barclays said it would hike its dividend for 2018, and pledged to return surplus capital more rapidly to investors.
Mr McFarlane became non-executive chairman of Barclays in April 2015, having been recruited the previous year from Aviva, the FTSE-100 insurer.
He soon stepped into an executive role after ousting Antony Jenkins, Mr Staley’s predecessor as chief executive.
Mr McFarlane replaced Sir David Walker, the banking veteran who was appointed to help repair Barclays’ fractured relationships with shareholders and regulators.
If 2018 is to be his final year as Barclays’ chairman, the Scot, who also chairs TheCityUK lobbying group, will be anxious to see rapid progress in delivering improved shareholder returns.
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Soon after taking over in 2015, he pledged to oversee a doubling of the bank’s share price, but they remain below the 260p level at which they stood when he joined.
Barclays declined to comment, while Sir Gerry could not be reached for comment.