subscribe Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Subscribe now
Picture: BLOOMBERG
Picture: BLOOMBERG

London - British bank Barclays is working on plans to save as much as £1bn, which could involve cutting as many as 2,000 jobs, mainly in the British bank’s back office, says a source with direct knowledge of the proposals.

Managers at Barclays, led by CEO Coimbatore Venkatakrishnan, who is known at the bank as Venkat, are reviewing proposals to bolster its profitability. As part of these 1,500 to 2,000 jobs could be cut if implemented in full, the person said.

A spokesperson for Barclays declined to comment on Thursday.

The potential cuts would primarily be at the Barclays Execution Services (BX) unit, and would form part of an overall target of reducing expenses by up to £1bn across the group over several years, said the source. 

Barclays has made efforts to reduce expenses in recent years by slashing bonuses, as well as jobs in its retail and investment banking businesses, but moves to shrink BX and the potential savings have not been reported before.

Created in 2017 to consolidate support functions for the bank’s two main business divisions, UK retail banking and international, BX was designed to eliminate duplication and implement post-crisis risk management rules.

Barclays’ £1bn cost-saving target would represent about 7% of the bank’s underlying annual operating expenses of £15bn in 2022.

BX’s staffing and costs grew significantly in recent years. Its headcount rose to about 22,300 by the end of 2022, from 20,000 at end-2017, and now accounts for more than a quarter of Barclays staff, regulatory filings show.

Meanwhile, annual staff costs at BX rose to £2bn, from £1.8bn.

Venkatakrishnan is under pressure to find ways to boost Barclays’ tumbling book value ahead of an investor presentation in February when he will unveil a fresh strategy.

Since taking over as CEO, the veteran banker has grappled with fallout from a trading blunder that cost the bank hundreds of millions of dollars.

He also faces a long battle to maintain morale across Barclays’ investment bank, where a talent exodus is hindering efforts to compete with European rivals such as Deutsche Bank, BNP Paribas and UBS.

Barclays share price fell 26% since Venkatakrishnan took charge on November 1 2021. Deutsche’s share price is are little changed, and HSBC’s  gained 37%.

Venkatakrishnan signalled on October 23 that Barclays will embark on further restructuring in preparation for its February 20 presentation, which is seen as an opportunity for the bank to convince shareholders that it has a plan to lift its valuation.

Barclays is “evaluating material structural cost actions”, the CEO said  when it reported disappointing third-quarter results in October.

Barclays has been working with Boston Consulting Group on a strategy review, focused on which parts of the business to invest in and which should be reduced or sold. It is also reviewing options for its payments business among other measures.

Reuters

subscribe Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Subscribe now

Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.