Barclays Hires JP Morgan In Broking Shake-Up

Barclays (LSE: BARC.L - news) is drafting in the Wall Street bank with the biggest share of UK broking relationships to help steer it through an intensive period of restructuring aimed at improving its performance.

Sky News understands that Barclays has in recent days appointed JP Morgan Cazenove as its corporate broker, alongside Deutsche Bank (Xetra: 514000 - news) , an incumbent.

JP Morgan will replace Credit Suisse (NYSE: CS - news) in the role, a decision which is understood to have been heavily influenced by John McFarlane, Barclays’ new chairman.

The appointment reunites Mr McFarlane and JP Morgan, with the two having worked together in his previous role as chairman of the insurance company Aviva (Other OTC: AIVAF - news) .

Mr McFarlane said when he took the helm at Barclays several weeks ago that he would rigorously examine the performance of its range of businesses, and would “put in place plans and action to improve them or curtail those that are unable to be resuscitated”.

The bank is in discussions to sell or spin off a number of subsidiaries which consume excessive capital or are underperforming, such as its natural resources investments arm.

Corporate broking is a quirk of the UK market, with investment banks accepting the lowly paid roles in return for the expectation that they will play a more lucrative part in future activity such as takeovers or capital-raisings.

JP Morgan counts one-third of FTSE-100 companies among its broking clients, with its market share having held up well since the combination of JP Morgan and Cazenove.

Credit Suisse was one of the advisers which aided Barclays’ £5.8bn rights issue in 2013, after which James Leigh-Pemberton, one of the Swiss bank’s top London-based executives, left to join UK Financial Investments, which manages the taxpayer’s bank stakes.

News of JP Morgan’s appointment by Barclays comes days after Sky News revealed that Goldman Sachs (NYSE: GS-PB - news) had replaced its Wall Street rival as the privatisation adviser to the UK Government .

That role will give Goldman an influential voice in the timing and structure of the sale of taxpayers’ stakes in Lloyds Banking Group and Royal bank of Scotland (LSE: RBS.L - news) (RBS) at a time when Goldman is itself bidding for another set of bank assets owned by the Government.

Barclays and JP Morgan declined to comment on Wednesday.