John Varley, who guided Barclays bank through the credit crisis without resorting to a government bailout, will retire next year as chief executive, to be succeeded by the head of the group’s highly profitable investment banking operation, the company said on Tuesday.

Robert E. Diamond Jr., 59, will take over as CEO on March 31. Currently the head of corporate and investment banking as well as the Barclays Wealth unit, he joined the company in 1996.

Mr. Diamond is moving up as governments are reviewing regulation, including a possibly momentous move in Britain to force banks to divorce investment banking from retail operations. At home, Barclays may also feel pressure from the government’s austerity drive which will shrink public spending.

Following its acquisition of Lehman Brothers’ U.S. operations, Barclays has become heavily dependent on the investment banking activity which is now Mr. Diamond’s domain.

Barclays Capital now commands 60 percent of the company’s capital needs, a share that may increase due to regulatory changes, yet is likely to be less profitable than the Barclays retail side, Evolution Securities said in a research note.

Barclays shares were down 3.14 percent at 312.8 pence in midmorning trading on the London Stock Exchange.

“Barclays is one of the very few stocks in our universe of banks that shows downside,” said Arturo De Frias, analyst at Evolution Securities, who rates the bank’s shares as “sell.”

“In the last three months, Barclays has underperformed the sector — the stock price is 5 percent up, albeit with considerable volatility, whilst the FTSE Eurotop 300 Banks has jumped 12 percent. Given the considerable pressures on investment banking returns, we expect this underperformance to continue.”

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