Barclays to trim staff by another 20 percent

BARCLAYS may cut an additional 20 percent of investment bank staff, with most of the losses in Asia and the global cash equities business, as chief executive Jes Staley seeks to shore up profitability, according to people with knowledge of the decision.

The Asia securities division, with operations in markets including Japan, Hong Kong and Singapore, was not considered competitive and profitable enough, said the people, who asked not to be identified because the strategy is private.

The cuts, which would come on top of an existing programme to eliminate 7 000 jobs at the investment bank through 2016, could be announced early next year, they said.

A spokeswoman at Barclays said the bank was “constantly monitoring our opportunities in different geographies and businesses”. Barclays employed 20 500 people at the securities unit at the end of 2014.

Staley, who took over on December 1, has been tasked with improving profitability at the investment bank, which is lagging the lender’s other divisions and has been hurt by rising costs tied to past misconduct and tougher capital requirements.

Since joining in April, chairman John McFarlane, 68, has pledged to refocus the business on the UK and US and has said the bank is reviewing the contributions of operations in Asia and the Middle East, because “we don’t like places that don’t make money”. Barclays has been cutting costs at its Asia-Pacific operations, where it generated revenue of £776 million (R16.81 billion) in 2014, about 3 percent of its total, compared with £12.4bn in the UK. The bank employed 18 200 staff in the region at the end of last year, according to the bank’s annual report.

Other banks are also shutting businesses to focus on more profitable areas.

Morgan Stanley was planning to cut as much as a quarter of its fixed-income staff after years of revenue declines and insufficient returns, people with knowledge of the plans said last week.

Standard Chartered, which makes almost all of its profit in Asia, said on November 3 that it would eliminate 15 000 jobs to help save $2.9bn (R41.59bn) by 2018.

Barclays fell 0.3 percent to 229.6 pence in London on Friday, extending its loss to 5.7 percent this year.– Bloomberg