Barclays to make big changes in investment banking, toss out speculators
07 May 2014
British investment bank Barclays is reportedly poised to announce a cull of staff, particularly 'wheeler-dealers', as profits in its investment banking division halved. Many London-based staff face the chop as boss Antony Jenkins sets out plans to overhaul the controversial arm of the bank.
Barclays said this week that a collapse in investment bank revenue hit first quarter profits and was still hurting income in April; adding that it is working on an overhaul of the flagging business, expected to be announced later this week.
Income from its investment bank fell 28 per cent, largely because of a 41 per cent drop in fixed income, currencies and commodities (FICC). The scandal-hit company is expected to unveil widespread job losses in the firm's ''casino'' banking division on Thursday.
The sharp in investment banking profits dragged down the rest of the group, as profits slipped 5 per cent to just under £1.7 billion.
The biggest job losses are expected to come in the firm's former Barclays Capital - Barcap - operations, built up by ex-chief executive Bob Diamond.
This area of the firm includes trading in currencies and bonds which traditionally made-up the bulk of the investment bank's profits but have been hit hard by a regulatory clampdown and slower business.
Around 450 senior executives in the division have already lost their jobs.
Barclays has already signalled 7,000 job losses in the UK this year and 12,000 across the group.
Jenkins, who replaced Diamond who quit in the wake of the Libor rate rigging controversy, is battling to repair Barclays' battered image. But he suffered a backlash after revealing that staff in the investment bank were paid £1.5 billion in bonuses last year despite profits plummeting.
Jenkins is likely to use Thursday's update to defend other parts of the investment bank that are doing well.
Profits at the retail bank soared by 20 per cent to £360 million in the first three months of the year, with Barclaycard up 17 per cent to £423 million.
However, figures from City watchdog the Financial Conduct Authority last month ranked Barclays the most complained-about bank.