LONDON: Barclays will struggle to find the right replacement for Antony Jenkins.
The UK bank dismissed its chief executive of three years on July 8, and a 3 percent share price jump suggests it was right to do so.
But the lender is in a strategic logjam which will make candidates think twice about applying for the job.
Jenkins was well-intentioned, but beset by bad luck and ill-starred judgments. In 2013 he reshaped the bank's strategy to grow its capital base, but the Bank of England wrong-footed him by forcing him to raise 5.8 billion pounds immediately.
Jenkins' focus on ethics was welcome, but initially seemed to take precedence over more pressing operational challenges in the investment bank.
Jenkins' ethical credentials then suffered because he hiked investment bank bonuses even though returns had fallen. Underlying Jenkins' departure is the sense he'd lost the confidence of the investment bank - hardly surprising, given his lack of trading or advisory experience.
The unit appears to be recovering: a 9.1 percent first-quarter return on equity outdid a pitiful 2.4 percent in 2014. It has a top five franchise in M&A advisory and underwriting in the US market - the largest for fees worldwide - and is ranked in the top three in interest rate trading, despite a recent halving of its investment bank assets.
But if investment banking is to be a part of Barclays' future the group needs a leader who can improve morale and performance, as well as maintain its market position. Credible candidates, meanwhile, may not want to come to the UK. Regulatory reforms have capped bonuses and will make bank chiefs criminally responsible for wrongdoing on their watch.
Elite investment bankers will think twice about joining a bank that is the most exposed to UK ring-fencing reforms.
The BoE has yet to stipulate how much capital Barclays has to hold to keep doing investment banking, and the cost of funding such activities is unclear.
Unless Executive Chairman John McFarlane wants to promote an internal candidate such as Finance Director Tushar Morzaria, he may have to hold the fort until clarity emerges.
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