The board is leaning toward appointing an external candidate to replace King, 55, with regulators set to introduce tougher rules next month holding senior executives accountable for misconduct, according to the people, who asked not to be identified because the information is private. A spokesman at Barclays declined to comment. King didn't respond to a call seeking comment.
Chairman John McFarlane last year hired Jes Staley as chief executive officer to revive earnings growth and reverse a two-year slide in shares that has left the bank trading below its book value, meaning investors think the company is worth less than its assets.
Barclays said last month it expects income at the investment bank, its least profitable unit, to be "broadly flat" in 2015 after announcing the closure of offices in nine countries to focus on the best-performing regions including the U.K. and the U.S.
King threatened to leave the bank last year after clashing with former CEO Antony Jenkins over the strategy at the investment bank, people said at the time. He was persuaded to stay on by McFarlane, who fired Jenkins in July over an alleged slow pace of restructuring at the U.K.'s second-largest lender.
Since joining, Staley has hired several executives from JPMorgan Chase for his new management team including C.S. "Venkat" Venkatakrishnan as chief risk officer and Paul Compton as chief operating officer. They both start in May.
Staley spent more than three decades at the U.S. firm, including stints running its asset-management and investment-bank divisions, while Finance Director Tushar Morzaria also joined from JPMorgan in 2013.
Staley is scheduled to present a strategic update on March 1 alongside full-year results.
Staley is seeking ways to shore up the performance of the investment bank, which has been battered by rising costs tied to past misconduct and a drop in trading revenue. The division, which had a return on equity of 5.2% in the third quarter, had income of 6.11 billion pounds ($8.7 billion) in the nine months through September. With revenue projected to remain flat in 2015, it would imply an 11% drop in the fourth quarter.
Since joining in December, the CEO has announced a fresh round of job cuts at the investment bank that will eliminate some 1,200 jobs worldwide and shut securities operations across Asia, people familiar with the matter said last month. Staley has also imposed a hiring freeze and is restructuring the wealth-management business, according to people with knowledge of the plans.
A "deteriorating" environment and poor prospects for returns mean the unit should be cut further, analysts at JPMorgan said Feb. 11. Chirantan Barua, an analyst at Sanford C. Bernstein Ltd., earlier this month urged Staley to take the "big decisions" including spinning off the investment bank and selling its Africa unit.
Barclays's board will meet in London on Wednesday and Thursday to debate the future of the Africa business, with options including a sale of the entire stake, according to two separate people familiar with the matter.