Higgins will join the Barclays Board as a Non-Executive Director on March 1, 2019 and take over as chairman in May after the AGM, the bank said in a statement.
"In Nigel Higgins we have found an ideal candidate. He is a hugely respected banker, a strategic thinker, someone with extensive international experience, and he has a strong positive leadership style," said Crawford Gillies, who led the process to appoint a successor to McFarlane.
Barclays, one of Britain`s biggest banks, has been subject to radical transformation in recent years and has faced uncertainty over its leadership, mainly due to regulatory scrutiny of chief executive Jes Staley`s treatment of a whistleblower.
Since taking over as CEO in December 2015, Staley has pushed an investment banking-led strategy that has drawn criticism from some shareholders and been the target of a campaign by activist investor Edward Bramson.
Bramson`s Sherborne Investors
Sherborne told 2018`s AGM in May "you are not getting rid of me yet." When he retires next year he will have served his full four-year term.
"Succeeding John McFarlane, who has done such a sterling job during a period of great change at Barclays, is a huge honour.... I am totally committed to helping Barclays and its people continue to develop and progress," Higgins said.
Barclays said in its statement Higgins has extensive experience of banking and financial services, gained through a 36-year career at Rothschild.
It added he had a strong track record as a strategic adviser to multiple major corporations and governments, a wealth of experience in building teams and culture on an international scale, and in growing businesses.
Sherborne is a specialist "turnaround" fund that wants Barclays to improve its financial strength and competitive position.
The bank last week reported third quarter profit before tax of 1.6 billion pounds ($2.07 billion), excluding litigation and conduct costs, above the 1.33 billion pounds expected by analysts polled by the bank.
The profit excluded costs from litigation and fines for misconduct, which have blighted Barclays in recent years as it paid out for misdeeds during and after the financial crisis.
Barclays shares closed at 175.54 pence on Thursday. They are down nearly 14 percent so far this year.
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