Barclays has unveiled its long-anticipated restructure under new chief executive Antony Jenkins, which will see the bank focus on its core operations in the UK, US and Africa, but do no more than maintain an “appropriate presence” in continental Europe and Asia to support its global investment banking activities.
The bank, which has around 140,000 employees, will cut 1,800 positions in its corporate and investment banking division based in the UK and a further 1,900 retail and business banking jobs in continental Europe during 2013. Although details were not given on where the European cuts would fall, the ‘Financial Times’ speculated that the bank’s operations in France, Italy, Portugal and Spain were likely to be affected. The available money for technology investments, already largely allocated to regulatory compliance projects or quick return on investment programmes that meet a long-term need, such as Pingit, is likely to continue to be hard to come by at Barclays – in common with many other banks at the moment.
The job cuts at Barclays are part of the bank’s goal to reduce its cost base by £1.7bn to £16.8bn in 2015, by which time it aims for its return on equity (RoE) to exceed its cost of equity, which it expects to maintain at 11.5% and were revealed as part of its results announcement earlier today which showed a reduced profit of £246m this year versus £5.9bn last year. The Libor manipulation scandal and slowing markets have hit the bank hard in the last 12 months.
Jenkins, who took over the role of chief executive after the departure last July of his controversial predecessor, Bob Diamond, admitted that 2012 had been “a difficult year” for Barclays and the banking industry generally following the London Interbank Offered Rate (Libor) manipulation scandal.
“The behaviours which made headlines during the year stemmed from a period of 20 years in banking in which the sector became too aggressive, too focused on the short-term, and too disconnected from the needs of customers and clients, and wider society,” he said.
“Barclays was not immune from the impact of these trends, and we suffered reputational damage in 2012 as a consequence.”
Barclays also confirmed recent reports that the controversial tax planning part of its structured capital markets (SCM) division, which has proved highly lucrative for the bank but also triggered accusations of orchestrating tax avoidance on an "industrial scale" from members of parliament (MPs), will be shut down.