Can the Billy Elliot of banking make Barclays dance again? Jonathan Moulds, the newly appointed chief operating officer for the bank, will certainly have his work cut out.
Moulds provides a welcome dash of colour to an increasingly bland UK banking landscape. His journey from the northern town of Halifax to a career trading derivatives in Chicago and London and earning a fortune substantial enough to become a leading arts patron and collector of Stradivarius violins is certainly more interesting than that of the grey men who hold most of the top jobs at British banks.
The idea that Moulds is a banking version of Billy Elliot, the fictional northern miner’s son who transcended his hardscrabble background to succeed as a ballet dancer, is of course an exaggeration. Moulds actually had a fairly straightforward ascent. He went to Cambridge University on a music scholarship, obtained a first-class degree in mathematics and went into derivatives trading.
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He gained markets expertise working for Chicago Research and Trading, a pioneering and highly profitable options and futures boutique that was bought by Nationsbank in 1993. Moulds prospered as successive domineering Nationsbank CEOs Hugh McColl and Ken Lewis went on an acquisition spree in the US that culminated with the North Carolina-based bank taking over California-based Bank of America in 1998, in what at the time was the biggest merger of two banks in the country.
Moulds moved from Chicago to London in 2005 after a decade as a high-profile player in the interest-rate derivatives market when it was a source of enormous profits for big banks and of hefty cash bonuses for trading heads. Annual payments in excess of $10 million were common in good years.
His exact responsibilities were sometimes unclear in subsequent roles, such as head of international for Bank of America and later European head of Bank of America Merrill Lynch. But Moulds was always well regarded for his stewardship at the bank and was not associated with the unhinged mortgage trading by Merrill Lynch that forced the investment bank into the arms of Bank of America in 2008, then threatened to push the acquirer itself into insolvency.
He eventually retired from the bank in 2012 to spend more time on his philanthropic interests in a choreographed departure that only featured any drama because Andrea Orcel decided at the last moment not to accept a role replacing Moulds, and instead went off to run UBS's investment bank.
Moulds therefore has far more money and a more impressive track record than his new boss, Barclays CEO Antony Jenkins. Moulds was also rumoured to be a long-shot candidate to replace Bob Diamond as CEO of Barclays in 2012, which should make for an interesting dynamic between the two men when Jenkins and Moulds start to work together in February.
The role of group chief operating officer has been revived for Moulds. Jerry del Missier, a fellow former derivatives trader who knows Moulds well, briefly held the title in 2012, but he was forced out of the bank along with Diamond in the wake of the Libor trading scandal, and the position has since been dormant.
Since taking over from Diamond as CEO, Jenkins has delivered a series of confusing reorganization plans that have resulted in a badly underperforming stock price. His background as a retail banker means that he will at least not be directly associated with the many on-going scandals surrounding trading practices in the investment bank.
But demonstrating that he had no idea what was going on at Barclays as a nominally senior executive under the Diamond regime is hardly a proud boast, and after over two years in charge Jenkins is coming under increasing pressure to deliver an effective overhaul of the bank.
Jenkins’ determination to communicate in teeth-jarringly bad management consultancy jargon was on display yet again in a press release announcing the appointment of a COO, which gives an indication of what Moulds will be up against in his new job.
“There are multiple major change programmes in flight across the Group, designed to achieve our ambitious goals, and which in turn help to drive the sustainable returns our shareholders deserve. A Group COO will give us additional leadership bandwidth and capability to make that happen,” according to Jenkins, or the automatic slogan generator in control of his computer. “I am delighted to welcome such a seasoned and able leader to Barclays, and I look forward to working with him to accelerate progress towards becoming the ‘Go-To’ Bank.”
Moulds managed to get an anodyne but straightforward and sensible quote included in the release as his contribution. “I am looking forward to taking up my new post and to working with Antony and my colleagues on the Executive Committee in helping the bank realize its full potential,” he said.
Why Moulds would want to return to the daily grind in London’s Canary Wharf and work for Jenkins is something of a mystery. He may have felt that at 49 he was too young to step away from a big business role and/or found that chairing various charities was not enough to fill his day. He was made a CBE in the recent British New Year’s honours list, which may have left him feeling that there are no more worlds to conquer when it comes to cultural good works.
Or a conspiracy theorist might wonder if Moulds senses an opportunity to have a crack at a position as CEO of a large bank. The performance of Jenkins has been so underwhelming that it would be no surprise if big shareholders in Barclays became restive, and Moulds will be conveniently placed if a decision to ditch the pilot emerges at some point.
And if Moulds does manage to bring some coherence to the faltering attempt to refashion Barclays then he can be expected to win plaudits for his efforts. That could position him strongly as a candidate should the top job at another bank come up for grabs.
Of course, in the current political climate he may not wish to present himself as ‘Jonathan Moulds, filthy rich former swap trader’. ‘Plain-speaking son of Halifax and restorer of order at Barclays’ is a much better image for the modern era.
This is not a role that Moulds has played in recent decades (if ever), but for a man of his undoubted talents it should not be too much of a stretch.