Agius will have to quit Lazard to become Barclays chairman

Marcus Agius, the head of Lazard in London, may soon step down from the investment bank after 34 years of advising chief executives on mergers and acquisitions if he becomes chairman of Barclays.

He emerged yesterday as the front-runner to succeed Matt Barrett in the role at the UK's third-biggest lender. Should he replace the charismatic Irish-Canadian, potential conflicts of interest would prohibit Mr Agius from retaining his Lazard role.

Both companies have fund management arms, and both offer similar structured products. Lazard advises on corporate activity; the Barclays capital investment bank is a major source of finance for companies.

Lazard and Barclays declined to comment but confirmation of Mr Barrett's intention to step down and the naming of his successor are expected within a fortnight. The headhunter, Spencer Stuart, has been retained by Barclays to search for a new non-executive chairman.

Bob Steel, a former vice-chairman at Goldman Sachs and an independent director at Barclays since June 2005, is understood to be another strong contender.

However, Mr Steel is tipped to rejoin his former Goldman colleague Hank Paulson, now the US Treasury Secretary. He is the leading candidate to succeed Randal Quarles as Mr Paulson's chief adviser on domestic finance.

Barclays is aiming to unveil a replacement for Mr Barrett before he attends the annual meeting of the International Monetary Fund in Singapore in the middle of next month. Should it prove too strict a timetable, the bank's deputy chairman, Sir Nigel Rudd, is understood to be ready to assume a caretaker role until a permanent chairman can be found.

Mr Barrett's imminent departure is the latest in a string of boardroom changes at Barclays since John Varley succeeded him as chief executive in 2004. His appointment from Bank of Montreal in October 1999 was intended to steady a bank rocked by overexposure to emerging markets in the aftermath of the Russian crisis a year earlier, and under fire for branch closures.

Simon Maughan, a senior analyst at Blue Oak Capital, said: "Matt Barrett came on board with a reputation for strong credit quality. One of his first jobs was to oversee a complete overhaul of Barclays' credit and risk management systems, which arguably will be his most enduring legacy."

Mr Barrett's charm, relaxed style and looks won over staff, the media and Barclays' major shareholders, and earned him the secret nickname of "Swiss Toni", after the debonair car salesman from The Fast Show.

Several major overseas acquisitions proved more successful for Mr Barrett than his chief domestic deal: the £5.4bn acquisition of Woolwich in 2000.

Candidates to succeed Barrett at Britain's third biggest bank

Marcus Agius

Marcus Agius has spent more than three decades as trusted adviser to the chief executives of many of the UK's leading companies.

During that time, he has orchestrated scores of deals for Lazard's clients - including Halifax, British Land and ITV - and built the investment bank into one of the most sought-after counsellors in the City.

Earlier this year, as chairman of BAA, he was at the heart of an unwelcome bid appr-oach. He helped orchestrate the four-month defence of Britain's leading airports operator, which was eventually sold to the Spanish construction group Ferrovial for £10.3bn.

The 60-year-old graduate of the Harvard Business School joined Lazard's research department in 1972 after two years as a mechanical engineer at Vickers, which had sponsored him through Cambridge University. He made his name at the bank by establishing long-standing relationships with clients while working on a string of high-profile deals including the battle for the helicopter maker Westland.

Soon after becoming chairman of Lazard in London in 2001, control of the bank passed from its founding dynasty to the veteran Wall Street deal maker Bruce Wasserstein, who led its stock market flotation last year.

Bob Steel

Bob Steel joined Goldman Sachs in 1976, where he worked as a salesman in the investment bank's equities division in Chicago, until relocating to London a decade later.

There, he established Goldman's Equity Capital Markets division, which leads corporate fundraisings, running offices in London, Paris and Frankfurt. In 1988, he was elected a Goldman Sachs partner and took charge of the bank's equities operations across Europe.

Back in New York in 1994, Mr Steel ran Goldman's equity division, and was appointed vice-chairman of the bank in 2002. He joined Goldman's management committee, where he served with Hank Paulson, who headed Goldman before becoming the US Treasury Secretary.

Mr Steel technically retired from the bank in 2004, but maintains an office there.

The 55-year-old is chairman of the board of trustees at Duke University, where he was an undergraduate before completing an MBA at the University of Chicago. He has reportedly contributed more than $100,000 to the Democrats and Republicans over the past four years.

Mr Steelis also a member of the New York Stock Exchange. He joined Barclays' board as an independent director in June last year.