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LONDON : British bank Barclays said on Tuesday it had chosen American Bob Diamond, head of its highly successful investment banking unit, to become chief executive in place of incumbent John Varley.
Barclays, the third-biggest British bank, said that Varley would step down at the end of March, 2011.
"John Varley has made an extraordinary contribution to Barclays during his long service with the group and the board is grateful to him for the tremendous progress Barclays has made during his tenure as group chief executive," Barclays chairman Marcus Agius said in a statement.
"I am delighted that Bob Diamond will be his successor. He is superbly qualified, with more than 30 years' experience in the banking sector, the last 14 of which have been with Barclays," he added.
Diamond, 59, is one of the world's highest paid bankers thanks to his success in running Barclays Capital. He was also behind Barclays' purchase of Lehman Brothers' US operations following the investment bank's collapse in 2008.
"I am honoured by the board's confidence in me and greatly motivated by the challenge of leading Barclays during the critical period ahead," Diamond said.
As chief executive, Diamond will receive an annual salary of 1.35 million pounds (US$2.08 million) but could earn millions more in bonuses, Barclays said.
Diamond will become deputy chief executive on October 1 ahead of replacing 54-year-old Varley, who managed to steer Barclays through the financial crisis without the aid of government support.
Varley said it had been a "great privilege" to serve as chief executive for six years.
Analysts said that Diamond's high pay was unlikely to go down well with Britain's new coalition government, which has been highly critical of bankers' bonuses.
Prime Minister David Cameron's official spokesman declined to comment on Diamond's appointment. "This is completely a matter for the board of Barclays," the spokesman told reporters. "It is not an issue for the prime minister."
The Conservative-Liberal Democrat partnership is meanwhile looking into whether Britain's big banks should separate their retail and investment units in the wake of the financial crisis.
The 2008 financial crisis that brought down a number of banks has been partly blamed on bankers taking great risks in a bid to win massive bonuses.
"In times of austerity, industry compensation continues to sit uncomfortably with politicians and the electorate, while questions over broader European banking strength have resurfaced," Keith Bowman, an analyst at Hargreaves Lansdown Stockbrokers, said on Tuesday.
Diamond's appointment comes amid renewed concerns surrounding the health of European banks, with the latest strains appearing over Anglo Irish Bank in Dublin.
A report in the Wall Street Journal on Tuesday said that Europe's "stress tests" on major banks "minimised" their debt risks and "understated some lenders' holdings of potentially risky government debt."
New York-based Diamond, who will relocate to London, will become deputy chief executive on October 1 ahead of replacing 54-year-old Varley, who managed to steer Barclays through the financial crisis without the aid of government support.
Varley, who reportedly always planned to retire next year, said it had been a "great privilege" to serve as chief executive.
The price of shares in Barclays fell by 2.91 per cent to 313 pence on London's benchmark FTSE 100 index, which was down 0.71 per cent in late trade. -AFP/wk/ls/fa
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