Barclays PLC has chosen the head of its investment banking activities in the Americas to drive the expansion of the wealth management business through Europe and beyond.
Thomas L. Kalaris, Barclays Capital's chief executive for the Americas and head of global distribution and research, is to move from New York to London to become chief executive of Barclays Wealth Management on Jan. 1.
In an interview Friday, Barclays PLC president Robert E. Diamond Jr., who has headed the wealth management business since December, said, "There is an opportunity for the Barclays brand and the wealth business to become much more of a pan-European business first and then look at Asia and the U.S., as well."
In a telephone interview, Mr. Kalaris said Barclays Wealth Management's absence from the United States is "certainly something that is missing from a global perspective" but that his unit has no immediate plan for entering the United States.
His mandate is to expand the wealth management business across Europe, where the industry is considered highly fragmented.
With customer deposits and assets under management worth about $132 billion at June 30, Barclays is the largest U.K. wealth manager. "We can move forward in multiples of that," Mr. Kalaris said, "and we expect that we would be able to significantly expand the client footprint."
The company will apply a strategy to wealth management similar to what brought it success in building Barclays Capital, he said.
"If you wanted to look at what is the process for extending this transformation, if you looked at the way we've operated Barclays Capital, that would be a good model," he said. "The things that are fundamental to us are a strong culture and world-class people. We have been notable for those two things, and we've been notable for being consistent in applying them over a long period of time."
Mr. Kalaris joined Barclays Capital in 1996 after 18 years at JPMorgan Chase & Co. That same year Mr. Diamond left Credit Suisse First Boston to become chief executive of Barclays Capital.
In an e-mail, Simon Willis, an analyst at NCB Stockbrokers Ltd., said Barclays Capital turned in "an excellent performance" last year. Its staff grew by 30%, he said, and this was "matched by revenue and profits growth."
Mr. Diamond's appointment of Mr. Kalaris "looks like he's parachuting one of his BCap guys in there," Mr. Willis wrote.
Mr. Kalaris said he expects to do "significant" hiring as he builds the wealth management business.
The goal will be to deliver wealth management products and services to "a very wide ranging client base," he said. His domain encompasses Barclays' U.K. and international private banking businesses, a retail stock brokerage, and Gerrard, a wealth management firm bought in 2003.
The final months of 2005 will be a transition period during which he plans to learn more about the business and get to know employees. He said he will have set priorities by early 2006.
"It's an organic build without any question," Mr. Kalaris said. But he and Mr. Diamond said they also expect to help consolidate Europe's wealth management segment.
"We know there is going to be a lot of movement in the business as there are so many dispersed subscale players," Mr. Diamond said. Barclays is "absolutely" prepared to do deals, he said.
In the near term, he said, "Spain is probably the biggest opportunity because Barclays has such an outstanding presence in the retail market there."
In an interview Friday, Richard Staite, an analyst at Société Générale Group's SB CIB in London, said that, given its retail banking presence in Spain and in South Africa, where it has a stake in Absa Group Ltd., "it makes sense for them to expand in those two particular countries."
Mr. Staite said Barclays and others have struggled in recent years to serve the "mass-affluent" market between the private-client segment and retail investors.
Barclays' wealth management unit grew rapidly in the first half of 2005. Its pretax profit grew 39% from the year earlier, and customer deposits and assets under management were up 5%. The results were strong but came off "a low base," Mr. Diamond said. "I don't think the starting point is anywhere near strong enough given the quality of our brand, our reputation, and our retail business."
Barclays named Jerry del Missier, the head of investment banking, and Grant Kvalheim, the head of the rates-equities business, as co-presidents of Barclays Capital. It also said Andrew Skirton, a co-CEO of Barclays Global Investors, will leave the company and that co-CEO Blake Grossman will become the sole chief executive.
