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Barclays goes American
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February 11, 1999: 11:15 a.m. ET
BankAmerica's Michael O'Neill joins U.K. bank after 3-month search
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LONDON (CNNfn) - U.K. bank Barclays Thursday appointed American Michael O'Neill as its new chief executive, following a nearly three-month search for a suitable candidate.
O'Neill, who is currently president of the Principal Investing & Wealth Management for BankAmerica will become the first non-Briton to hold the post.
The 52-year-old will fill the vacuum left by the resignation of Martin Taylor, who quit unexpectedly last November after a board room row over future strategy.
Barclays' (BARC) shares responded positively to the news, as the veil of uncertainty lifted from the stock. The stock was up 5.5 percent in mid-afternoon London trading at 1,419 pence.
Much of the positive sentiment came from speculation that O'Neill's appointment signaled an imminent merger. He was heavily involved in two of the U.S. mega-banking mergers of recent years. In his previous role as chief financial officer of BankAmerica (BAC), he oversaw the tie-up with NationsBank last year.
Four years earlier, he negotiated the takeover of Continental Bank, where he also held the post of CFO, by BankAmerica .
"Given his experience with mergers there is a lot of speculation that he will go in there and do a big deal," said Mark Thomas, banking analyst at Credit Lyonnais in London, "but we're a bit skeptical of that."
O'Neill has never held a chief executive post before and Thomas believes the new Barclays boss will want to make his mark first. "As chief executive he will want to assess the various businesses first and that could take between six and 12 months."
Institutions had pressured Barclays to appoint an outsider to give it a major makeover, particularly in its struggling investment banking operation. O'Neill has already voiced his support for the business, which he said had a "very critical role to play."
Thomas questions, however, whether the new boss is the right man for the job. "He clearly has a global perspective but on the downside it has been 10 years since he was in the U.K. so he will have a somewhat historic knowledge of the market," he said.
O'Neill was also one of the architects of the troubled alliance between BankAmerica and investment bank D.E. Shaw and Co.
Thomas also points out that the going rate for a bank chief executive in the U.S is around £6 million ($10 million) a year. O'Neill's total package with Barclays is worth around £4 million.
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