(Bloomberg News) Robert Diamond, the architect of Barclays Plc's investment banking expansion, stepped down as chief executive officer, succumbing to political pressure to go after the bank admitted to rigging global interest rates.
Diamond, 60, will resign immediately, the London-based bank said in a statement today, a day before he faces questions by British lawmakers. Diamond became CEO of Barclays on Jan. 1, 2011, after joining the bank in 1996. Marcus Agius, who said yesterday he planned to step down, will become full-time chairman and lead the search for a new CEO.
Barclays was hit by a record 290 million-pound ($455 million) fine last week for rigging the benchmark for more than $360 trillion of securities. Diamond had yesterday defied pressure to quit, pledging to implement the findings of a review into how the bank sets the London interbank offered rate.
"Diamond's position had clearly become untenable," Gary Greenwood, a banking analyst at Shore Capital in London, said by e-mail. "While the company says that it will consider internal and external candidates to fill the role of CEO, we believe that it is of paramount importance that an external appointment is made in order to clean up the image of the company."
The stock rose 3.3 percent to 174 pence at 10:48 a.m. in London trading, giving the company a market value of about 21.3 billion pounds. It was the best performer in the Bloomberg Europe Banks and Financial Services Index today.
Diamond and Agius are the industry's most senior executives to announce their departures following the probes.
"The external pressure placed on Barclays has reached a level that risks damaging the franchise," Diamond said in the statement. "I cannot let that happen. I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth."
The shares plunged 16 percent on June 28, when the Libor fines were announced, on speculation Barclays could face billions of dollars in lawsuits. U.S. and U.K. regulators said traders at the U.K.'s second-biggest bank by assets routinely coordinated with counterparts from at least four other banks in an attempt to move Libor and other benchmarks.
"I think after everyone went home Bob thought, there's gigantic pressure on the organization, and I'm a lightning rod," said Leigh Bruce, a Barclays spokesman in London. "Bob decided that this could become a distraction and the best thing for the bank and the franchise and everybody was for him to step aside and let the bank go forward."