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Barclays said Diamond, credited with rebuilding its investment bank since joining 14 years ago and earning headline-making bonuses in the process, will take over from Chief Executive John Varley at the end of March.

Varley had indicated that he wanted to move on when he turned 55. The handover to Diamond, who is 59 and missed out on the top job when Varley took the helm six years ago, comes as no surprise to industry analysts, who said it meant the bank was likely to keep much of its focus on the investment banking arm, Barclays Capital.

"Bob Diamond has been the main force driving the very successful expansion of BarCap. With him as CEO we would expect the CIB corporate and investment banking angle of the bank to grow even more, in detriment of the retail angle," said Arturo de Frias, analyst at Evolution.

Diamond said there would be no change in strategy at the bank, which avoided taking taxpayer bailout cash during the financial crisis and has emerged as one of the relative winners of the financial crisis.

"There is absolutely no space between John and Chairman Marcus Agius and I on the strategic direction of Barclays. We have a lot of work to do around execution, but there is no change of strategy here," Diamond told reporters on a conference call.

Affable and charismatic, the Concord, Massachusetts-born son of two teachers has built BarCap into one of the leading banks in debt markets and is attempting to take on Wall Street powerhouses such as Goldman Sachs GS.N by expanding into equities and advisory, boosted by the takeover of the U.S. operations of Lehman Brothers two years ago.

Diamond, who also runs Barclays private banking arm and recently took control of the commercial bank, will move back to London after spending most of his time in New York after the Lehman deal. He will become deputy CEO for a handover period from October.

Diamonds long-time lieutenants Jerry del Missier and Rich Ricci will take over as co-chief executives of BarCap from October.

Diamond is one of Europes highest paid bankers. He has not taken a bonus in the last two years, but was paid 21 million pounds in 2007 and received 26 million pounds last year for shares cashed in from the sale of asset management arm BGI, prompting a senior government official to brand him the "unacceptable face" of banking.

As CEO his base salary will be 1.35 million pounds $2.07 million, topped up by an annual bonus of up to 3.4 million pounds and an annual long-term share incentive scheme worth 6.8 million pounds in 2011.

HSBC CHANGE

Meanwhile HSBCs chairman Stephen Green is set to step down from Europes biggest bank to become trade minister in Britains coalition government, British media reported.

Confirmation was expected later on Tuesday.

Green, 62, joined HSBC in 1992 and was appointed chief executive in 2003 before taking up the role of chairman in 2006.

Mervyn Davies, a former chairman of Standard Chartered STAN.L, served as trade minister under the Labour government which lost power in May, and the new government has had difficulty replacing him.

There has been speculation for some time that Green would step down, and in May the Sunday Telegraph newspaper said board members John Thornton and Simon Robertson were the frontrunners to replace him as chairman.

Barclays Varley has also been linked to a government job. But he said on Tuesday he had nothing lined up and planned to spend more time on his charitable work.

Reporting by Steve Slater, Kate Holton, Myles Neligan, Karolina Tagaris, Keith Weir and Sudip Kar-Gupta; Editing by Greg Mahlich