Gardening leave of £1m for Barclays UK chief

Roger Davis is stepping down as head of Barclays' underperforming UK banking business after just two years at the helm.

He stands to pocket up to £1m in pay and bonus, provided he does no work for a competitor for at least a year.

But Mr Davis - a Sandhurst-trained former British Army tank commander - is already on the look out for a new challenge.

He said: "I want to run a company, a FTSE 100 company, not necessarily in the financial services industry. I'm a business leader, not a banker.

"John [Varley] has just stepped up to the top job here and will be around for a long time to come. I'm only 49 and I'm still looking for fresh challenges."

Industry insiders reckoned Mr Davis's sudden departure may have been prompted by pressure from Mr Varley, his chief executive, who wants to stamp his authority on the bank.

Mr Davis, who earned £1.3m last year, steps down from Barclays' board today and will leave the bank in April. He is available as a consultant until October.

His job is being carved up between three people. Gary Hoffman, the chief executive of Barclaycard and tipped as a future group chief executive, immediately becomes chairman of both the credit card business and UK banking.

Both Anthony Jenkins, poached from Citigroup to take over as chief executive of Barclaycard, and Deanna Oppenheimer, who is promoted from chief operating officer to chief executive of UK retail banking, will answer to Mr Hoffman.

So too does Peter Harvey, a Barclays veteran of 31 years, who becomes head of UK business banking.

Mr Davis trained as a stockbroker at Flemings before joining Barclays Capital, the investment banking division run by Bob Diamond, in 1997. Rumours of rift between the pair have circulated in recent weeks.

Mr Davis took over Barclays' UK banking business in January last year, four months after Matt Barrett controversially stepped up from chief executive to chairman.

There, he was charged with reviving the flagging fortunes of the most visible part of the group.

The UK bank has 14 million customers and 43,000 staff, but has suffered stuttering growth in recent years in areas such as mortgage lending and unsecured loans.

David Williams, a banking analyst at Morgan Stanley, said: "We don't think that the turnaround in the UK retail business is being seen yet. Barclays could argue they're only 12 months into a three-year programme and the results will be back-end weighted, but we think it hasn't come through yet and they've still got it to prove."

Last year, Barclays posted record £4.6bn profits. But profits from its UK banking business were flat at £2.45bn, compared with £2.43bn in 2003.

Shares edged 0.5 lower to 603p.