As widely expected, Tom King has resurfaced at Barclays Capital, where he’ll be co-head of corporate finance with New York-based Ros Stephenson.

This is not good news for Citi. As we reported previously, Tom was a popular chap and others may feel the urge to follow where he leads.

It doesn’t help that Citi’s investment bank hasn’t been doing particularly well overall.

It’s also slipping (albeit slowly) down the M&A rankings, coming 10th for European M&A in the third quarter according to Thomson Financial, down from 7th in Q3 2008. Barclays Capital ranked outside the top 25 for deals completed, but has potential.

“Tom King was the glue that held Citigroup together. He was an unusually charismatic and trusted guy that people felt a lot of loyalty to,” says one headhunter. “The risk for Citigroup is that BarCap has a big cheque book and people will go and join him.”

Some Citi corporate financiers have left for Barclays already. Julian Vickers and Jim Peterkin, two energy bankers, went to BarCap in May.

However, another headhunter says Citi has been aware of the King-going-to-BarCap risk for several months and has taken mitigating measures. Options for key staff have allegedly been re-priced to prevent defections.

And, in a fairly gushing article, Financial News reports that King’s successors – Manuel Falco and James Bardrick – are themselves popular chaps whose promotion demonstrates that Citi is a place where fresh blood bubbles to the top.