Arab Today, arab today barclays bank swings axe as jobs cull hits 19000
Last Updated : GMT 15:33:39
Arab Today, arab today
Arab Today, arab today

Barclays bank swings axe as jobs cull hits 19,000

Arab Today, arab today

Arab Today, arab today Barclays bank swings axe as jobs cull hits 19,000

London - AFP

Scandal-hit Barclays will shrink its investment bank in a radicalrestructuring that will axe 19,000 jobs across the entire group over the next twoyears, it said Thursday.The British lender will this year cut 14,000 positions, or one-tenth of its globalworkforce, more than an initial plan to remove up to 12,000 jobs in 2014.Some 7,000 investment bank staff will lose their jobs by 2016 -- more than a quarterof employees at the division, whose huge bonuses and vast salaries have fuelledpublic and shareholder anger.Barclays said in a statement it will also create a "bad" bank for non-core assets witha total value of £115 billion ($195 billion, 140 billion euros) that would be sold orsimply allowed to run down.As part of the overhaul, the company will incur £800 million of extra costs, exit its European retail banking business and focus on its Africa-wide and credit cardbusinesses.Chief executive Antony Jenkins has been on a mission to reduce the influence ofBarclays' investment bank since replacing Bob Diamond -- the much-malignedformer chief executive who was forced to resign after the 2012 Libor rate-fixingscandal.- 'A bold simplification' -"This is a bold simplification of Barclays," said Jenkins, who was formerly thegroup's retail head."We will be a focused international bank, operating only in areas where wehavecapability,scaleandcompetitive advantage.Barclays employs about 139,000 staff worldwide, including around 26,000 in itsinvestment bank. It will also create Barclays Non-Core -- a unit housing "assets which do not fit thestrategic objectives" of the group that it will run down over time, the statement said.The majority of these so-called risk-weighted assets (RWAs), about £90-billion worth,are currently under the control of the investment bank unit.Barclays will rid itself also of £16 billion worth of Europe retail RWAs.Housing much of Barclay's investment bank and continental European retail operations in a "bad bank" mirrors moves made by UBS in 2012 when it decided toexit the riskiest fixed-income trading areas.It will also help Barclays avoid the multibillion-pound writedowns that haveaccompanied the establishment of other "bad banks", including by Royal Bank ofScotland and UniCredit.Barclays said it expects to incur costs on top of the £2.7-billion restructuringamount it had announced 15 months ago- Share price jumps higher The strategy update sent Barclays' share price soaring 7.87 percent to finish at262.45 pence on London's rising FTSE 100 index on Thursday."While Barclays is likely to deliver some poor earnings numbers as it transitions toits new structure, the final form should be a more stable and focused bank,something investors may be prepared to pay for," said analyst Jonathan Jackson atbrokerage Killik & Co.The lender earlier this week said pre-tax profits almost halved at its investmentbanking arm during the first quarter of the year.They dived 49 percent to £668 million in the three months to the end of Marchcompared with a year earlier, hit by sliding revenues.Barclays is still seeking to fix a reputation badly damaged by its role in the Liborscandal, while it has also been probed along with other banks over possiblemanipulation of foreign exchange trade.Despite poor earnings, Barclays increased the money available for staff bonuses byalmost 10 percent earlier this year, angering some politicians and union bosses. The Libor scandal erupted two years ago when Barclays was fined £290 million byBritish and US regulators for attempted manipulation of Libor and Euriborinterbank rates between 2005 and 2009. Euribor is the eurozone equivalent of Libor."My goal is unchanged: to create a Barclays that does business in the right way, withthe right values, and delivers the returns that our shareholders deserve," Jenkinssaid.Barclays was last year was also forced into a huge £5.8-billion shares sale, or rightsissue, to meet regulatory demands to strengthen its capital buffers.Diamond, who headed the investment bank before becoming chief executive, wasone of the world's highest paid bankers and helped to turn Barclays into a leadingplayer in investment banking.

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Arab Today, arab today barclays bank swings axe as jobs cull hits 19000 Arab Today, arab today barclays bank swings axe as jobs cull hits 19000

 



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