The head of Barclays' underperforming UK business is leaving after just two years at the helm, the bank said yesterday in a surprise move that has rattled nerves about prospects for the unit's revival.

Barclays said the head of its UK banking operations, Roger Davis, would be replaced by Gary Hoffman, currently head of its Barclaycard credit card unit. It announced several other senior management changes.

Britain's third-largest bank is attempting to revive the performance of UK banking, which accounts for 45 per cent of group profits, but is struggling to grow in retail banking due to a consumer spending slowdown and rising bad debts.

"It's a little bit surprising Roger has gone so early in his time at the UK bank and in terms of the turnaround of the UK business," said David Williams, analyst at Morgan Stanley. "It's unsettled the market a bit. Any unexplained personnel changes aren't going to be appreciated."

Mr Davis, who is a member of Barclays' executive board, will step down this week, but will remain available to the group until October next year. A spokesman for the bank said it was Mr Davis's decision to leave for "a new challenge". WestLB analyst James Hamilton said: "He set out a three-year plan, and here we are a bit more than six months into the three-year plan and he's disappeared. It begs the question 'why?'."

"To comment that he is looking for new challenges is puzzling to say the least," Michael Helsby, analyst at Fox-Pitt Kelton, said. "He had a big challenge. That he is leaving will undoubtedly lead to investor concerns about Barclays' ability to execute the retail turnaround. We have been sceptical for a while."

Mr Davis (49) has been at Barclays for eight years, heading the UK business since the start of 2004.

Reuters