Barclays lines up Debenhams chairman Cheshire to head UK bank

Barclays is lining up Sir Ian Cheshire to lead its new ring-fenced UK bank as it prepares to adopt a new regulatory framework designed to insulate taxpayers in the event of a future financial crisis.

Sky News has learnt that Sir Ian, the former boss of B&Q-owner Kingfisher, has been identified as the preferred candidate to chair Barclays UK.

An application has been submitted to the Prudential Regulation Authority (PRA), the main banking watchdog, in connection with the prospective appointment, according to insiders.

Assuming it is approved, Barclays intends to make an announcement about Sir Ian's recruitment in January, they added.

Sir Ian is one of Britain's best-known businessmen, chairing the department store chain Debenhams and acting as the Government's lead non-executive director in Whitehall.

The only possible concern about his appointment to lead Barclays' UK operations could relate to his prior directorship of Bradford & Bingley, the high street mortgage lender which had to be bailed out by taxpayers during the 2008 financial crisis.

Sir Ian was a non-executive on the board of B&B for several years before a freeze in wholesale funding markets led it, like others, to fall into the arms of the state.

If he does land the Barclays role, Sir Ian would work alongside the UK entity's chief executive, Ashok Vaswani, overseeing its UK retail banking operations, UK consumer credit cards business, UK-based wealth offering, and corporate banking for smaller businesses.

With roughly 22 million retail customers and almost one million business banking clients, it will be one of the largest UK-based lenders, while most of Barclays' international and investment banking activities will sit within a new non-ring-fenced entity run by Tim Throsby, a former JP Morgan executive.

The applications for the appointment of a chairman at Barclays UK comes a year after the group's chairman, John McFarlane, sparked fury at the Bank of England by proposing a structure under which its retail operations would temporarily be owned by its investment bank.

The plans were reworked following an intervention by Mark Carney, the Bank of England Governor.

Barclays has said that it intends to implement its ring-fencing plans during the Easter weekend in 2018, which would give it several days to execute the logistically complex task of creating a major new UK bank.

Other lenders have also begun making preparations for the new ring-fencing regime which formally comes into effect in 2019.

HSBC recently named Dame Clara Furse, former boss of the London Stock Exchange Group, as the chair of its UK bank.

Barclays and Sir Ian both declined to comment.