Robert Diamond Jr., will be the next CEO for Barclays Plc, succeeding John Varley.  As the architect of Barclays Plc’s investment banking expansion, Mr. Diamond, 59, helped turn Barclays into a global brand with the acquisition of Lehman Brothers’ operation in the United States.  A charismatic American, he was equally responsible for much of the bank’s international and financial growth in the last decade, basically building up Barclays’ investment banking business from scratch.

He'll become deputy CEO next month before John Varley, 54, steps down at the end of March, and will make as much as $18mn.  Mr. Diamond, who moved to New York to oversee the integration of the Lehman business, will move back to London to take the CEO job. 

In that role, he will have to defend his preferred banking structure, which combines an investment banking business with a consumer banking operation - and which runs counter to the U.K. government expectations for financial institutions.  Some analysts said Barclays could be forced to spin off its mainly British retail bank from Barclays Capital, as a government commission considers forcing lenders to separate the businesses.  Nevertheless, the appointment showed “Barclays’ faith in the universal banking model bringing as it does Bob Diamond’s investment banking expertise into the bank’s retail operation,” the British Bankers’ Association said in a statement today.  In the meantime, Barclays, the U.K.’s 3rd-biggest bank, is trying to cut the proportion of pretax profit generated by its investment bank to a third, down from two-thirds in the first half of 2010.   [NYTimes, 9/7]