Controversial tax boss leaves in Barclays shake up

Tim Wallace
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BARCLAYS’ investment arm will be radically shaken up with the equities and fixed income arms being merged into a streamlined new markets division, according to an internal memo seen by City A.M. yesterday.

Iain Abrahams is the most high-profile banker stepping down in the reorganisation. He came to public attention by creating controversial products to reduce firms’ and high-earning individual’s tax bills.

The executive vice-chairman’s departure comes ahead of a wider reputational review which will report next month, determining which product lines and pay practices the bank wants to continue as part of its programme to clean up its tarnished image.

Executive committee members Ivan Ritossa, who worked in FX, and distribution head Guglielmo Sartori di Borgoricco are also leaving at the end of this year.

Eric Bommensath will head up the newly merged markets division, a promotion from his existing role in charge of fixed income, while Skip McGee is becoming chief executive of corporate and investment banking in the Americas.

Barclays said the changes should give the investment bank’s clients better access to all its services, as well as ensuring the executive committee has a rounded view of new regulations.

But analysts believe it also represents some shrinkage from the investment bank.

“This shake-up will be a small negative for incomes and a big positive on cost savings, indicating a more aggressive focus on costs than I was expecting,” said banking analyst Cormac Leech from Liberum Capital.

“Overall it does suggest some de-emphasis of the investment bank at Barclays.”