The City of London is still pretty enamoured with the Irish-born head of Barclays Bank, 56-year-old Matthew Barrett. This week he unveiled another impressive set of results and showed how he is putting his mark on Britain's third-largest bank.

He is among the handful of key players shaping British banking, and the markets are closely monitoring his next move in a rapidly consolidating market. Barclays isn't under immediate pressure to make an acquisition, after its purchase of the Woolwich mortgage bank last summer. The spotlight now falls on Abbey National and Lloyds TSB, Bank of Scotland and National Australia Bank. Lloyds has launched a £19 billion sterling (€29.78 billion) bid for Abbey National, which is expected to be rejected. Abbey National is pursuing merger talks with Bank of Scotland, which have been given the green light by the regulators. National Australia Bank, which owns National Irish Bank, has indicated that it would like to crash the Abbey National/Bank of Scotland party.

Mr Barrett and his management team are taking more than a passing interest in these developments, and will not want to be left behind. Some analysts believe Barclays may seek to do a deal with one of the losers, depending on the outcome, with Bank of Scotland being increasingly mentioned.

Others, however, believe Bank of Scotland is nothing more than a red herring, with Barclays next move more likely to be in France or Germany.

Mr Barrett's European ambitions for Barclays are well known, although many of the analysts who meet him regularly point out that what he says and what he does can be at odds.

The charming chief executive is an accomplished speaker, with a ready wit and commanding presence. One London-based analyst describes him as a "wordsmith", but adds: "He says a lot of things but you can't always trust it". This specifically refers to his utterings to the market ahead of completing the Woolwich deal.

Whatever the doublespeak, the Woolwich deal has been hailed as a good one for Barclays. It not only represents good value for shareholders but, more importantly, provides a blueprint for the future operating structure at Barclays.

The Woolwich mortgage bank is a lean operation, with a relatively flat structure, run by a highly regarded management team. Its "anytime, anywhere" customer-friendly ethos is exactly what Mr Barrett wants to achieve at Barclays.

He has already shaken up the staid and hierarchical Barclays radically since his arrival in 1999. Analysts suggest that, if he can superimpose aspects of the Woolwich model on to even parts of Barclays' operations, the upside in terms of revenue growth will be substantial.

It has also recently entered a strategic alliance to sell Legal & General's insurance and pension products through its network.

The smart money in London seems to be on Barclays seeking a European bancassurance presence with the likes of ABN Amro, Aegon and Fortis being mentioned as future acquisition targets. Mr Barrett was an unknown quantity when he arrived at the Barclays HQ on Lombard Street. Though born in Ireland, he had spent his career at the Bank of Montreal and speaks with a curious mid-Atlantic drawl. The only things the City knew about him were that he had failed to merge Bank of Montreal with Royal Bank of Canada, and that nude pictures of his former second wife, Ms Anna Marie Sten, had been published on the Internet.

In between Montreal and Barclays, he briefly became chairman of Newbank, the proposed merger between ACC and TSB Bank that was to be floated as a public company. Before that fell apart, he was headhunted by Barclays and offered his resignation to the Minister for Finance, Mr McCreevy, who is a friend.

His appointment was a radical departure for Barclays. The institution, founded by Quakers, was viewed as highly conservative and falling apart. "Barclays was a joke, but under Mr Barrett it is taken a lot more seriously," according to one London source. He has been a breath of fresh air for the City of London. Mr Donald Tosh, head of research at Morley Fund Managers in London, is a huge fan and is impressed with his strategy for Barclays. "Mr Barrett and the team running Barclays can tell shareholders what the investment return on capital is, what the value added is, and that is a great encouragement to shareholders," he explains.

Mr Neil Cumming, senior UK equity fund manager at Aberdeen Asset Management, says the City is happy that Mr Barrett has done a good job for Barclays and this has been reflected in its strong share price. "Rather than re-inventing the wheel or adopting a risky strategy, his plans revolve around making the most of the bank's existing customer base, which has been very successful," he says. His view of Internet banking as an additional delivery channel for customers rather than something to be offered separately under a snappy new name has been proved correct and today Barclays boasts 1.7 million Internet customers.

His plans for closing bank branches were not well received though and he quickly incurred the wrath of the British public. The timing of the branch closure announcement was unfortunate, as it coincided with a new advertising campaign to launch Barclays as the "Big Bank".

A swift climbdown and a watered down branch closure programme was subsequently agreed. No shrinking violet though, Mr Barrett was quick to point out the cuts planned by Royal Bank of Scotland at NatWest made Barclays' proposals "look like a leisurely stroll on a picnic".

He has also been equally blunt about directors' remuneration, having endured sniping about his £6 million pay packet. "Some people want simplicity but people like me don't want the simple life. The management of complexity is what people like me are overpaid to do."

For its part, the City is happy to let him get on with it.