Barclays set to slash costs, ax 2,000 jobs: reports
AFPLONDON--Troubled British bank Barclays is set to ax annual costs by 2 billion pounds (US$3.1 billion) and cut 2,000 investment bank jobs, media reports said Monday on the eve of its 2012 results.
February 13, 2013, 1:28 am TWN
The Financial Times (FT) newspaper, which cited bank insiders and analysts, said that the cuts — equivalent to 10 percent of the group's cost base — would focus on a retrenchment of investment bank operations particularly in Asia.
The scandal-hit lender will also announce a partial wind-down of retail and commercial banking in parts of Europe, such as Italy.
The FT added that as many as 2,000 jobs would be axed at its investment banking division, with thousands more positions at risk in other parts of the business. A group spokeswoman declined to comment on the matter.
The Sunday Times newspaper had reported over the weekend that the bank would close its Structured Capital Markets division, which gained notoriety for its advice to multinational companies on reducing their tax bills.
Barclays chief executive Antony Jenkins will present Tuesday's results and strategic overhaul as he bids to transform its reputation following last year's Libor rate-rigging crisis. It was also hit hard by the mis-selling of credit insurance and interest rate hedging products.
“Tuesday is an important day in the 320-year history of Barclays. Combined with announcements on purpose and values, our strategy review will set out a fundamentally new approach for a new era,” Jenkins wrote in the Sunday Telegraph.
“It will provide a road map for long-term success and I am confident that, given time, it will show that the understandable skepticism about our commitment to real change was misplaced.”
Earlier this month, Jenkins that he would give up his 2012 bonus after a “very difficult year” that was marred by the Libor affair.
Last week, Barclays had set aside another 1 billion pounds on Tuesday to cover compensation for mis-selling credit insurance and interest rate hedging products.
The bank was thrown into crisis in June 2012 when it was fined 290 million pounds by British and U.S. regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.
The Libor system was found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.