Financial News

  • 9 May 2014, 15:37

Barclays: 20,000 Job Cuts In 'Break From Past'

Barclays has confirmed around 20,000 job cuts under a new strategy that distances it from the 'casino banking' championed by former boss, Bob Diamond.

The details - as reported by Sky's City Editor Mark Kleinman on Wednesday evening - were revealed following a review which aimed to reduce risk in its investment operation and cut excessive costs.

Barclays confirmed 14,000 positions would be axed across the Group during 2014 - around half of them in the UK.

A further 7,000 positions will go in the investment bank up to 2016 - but 2,000 of those losses are included in the 14,000 figure.

In addition to the job cuts, the bank's chief executive Antony Jenkins confirmed the creation of Barclays Non-Core - a unit to house "assets which do not fit the strategic objectives" of the group.

Barclays said it would look to run down or exit Risk-Weighted Assets worth £115bn from the new unit.

In an interview with Sky News, Mr Jenkins said the job losses were a result of "the world of investment banking" being fundamentally changed due to greater regulation and increased capital requirements.

He told Business Presenter Ian King: "We've got many great components in our investment bank that do fantastic work for our clients but some parts just don't work in the new world and that's really where we're re-focusing the bank away from those parts to the parts that work for our clients."

The bank's update pleased investors - with its share price rising more than 3% when the FTSE 100 opened for business.

Mr Jenkins said: "This is a bold simplification of Barclays. We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage".

He added that Barclays would become "leaner, stronger, much better balanced and well-positioned to deliver lower volatility, higher returns, and growth".

The bank's actions place Mr Jenkins' personal stamp on the Group - signalling an end to the seemingly limitless ambition placed on the investment operation by his predecessor, Bob Diamond, who quit over the Libor rate-rigging scandal.

Barclays said it now expected 30% of Group profits to be made by the investment bank - down significantly from the average 50% it contributed under Mr Diamond.

Of the £115bn placed in Barclays Non-Core, £90bn of the toxic assets are from the investment bank.

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