Leading investors in Barclays Bank (BSC) are backing Stephen Hester to succeed Robert Diamond as the new chief executive of Barclays PLC (BCS), the Sunday Telegraph reports, citing one of the bank's top-10 shareholders. Mr. Hester is currently CEO of state-controlled U.K. lender Royal Bank of Scotland Group PLC (RBS).

Barclays should make an external appointment for its next CEO following the departure of Mr. Diamond, who resigned following an interest rate-fixing scandal last month, the newspaper said, citing the same unnamed source.

Shareholders want to see a "leaner and meaner" Barclays which is less reliant on underperforming parts of its investment bank business, such as equities, the report said.

Barclays declined to comment on the story. RBS couldn't immediately be reached for comment.

Sir David Walker, the newly installed Barclays chairman, told the Sunday Telegraph that successfully filling the CEO post was his top priority and that he would be willing to look overseas for the right candidate.

Mr. Walker said there was still a long way to go in the process and that an internal candidate or a U.K.-based one could take the job.

Newspaper Web site: http://www.telegraph.co.uk

-Write to London bureau at generaldesklondon@dowjones.com

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