Barclays axes 3,700 jobs

Barclays’ new chief executive officer pledged a fresh course for the lender yesterday, axing at least 3,700 jobs and pruning its investment bank as he seeks to rebuild its reputation and boost profitability after a series of scandals.

We must act at all times with good values

In an attempt to distance the bank from the aggressive, high-risk culture championed by his predecessor, Antony Jenkins said Barclays would put ethics above earnings at the bank which has become a focus for public anger at the excesses of the financial sector.

“Barclays is changing. There will be no going back to the old way of doing things. We get it, we are changing the way we do business, we are changing the type of business we do,” Jenkins told a news conference, during which his unveiled his grand plan, dubbed Project Transform.

“We must act at all times with good values.”

Keen to convince a sceptical public that Barclays can change, Jenkins has cut the average bonus for its investment bankers, halted trading in soft commodities “for speculative purposes” and closed its structured capital markets division, which one lawmaker last week said advised clients on “industrial scale tax avoidance”.

Jenkins said he had full confidence in his executive team but declined to answer questions about the future of Rich Ricci, head of Barclay’s investment bank, where many of the scandals emanated.

Investors applauded the bank’s plans to raise its dividend and slice £1.7 billion (€1.9 billion) in annual costs, including cutting 1,800 jobs in corporate and investment banking and 1,900 in its European retail and business banking.

“A commitment to cost reductions and evidence of cost control in the investment bank bonus pool have spurred today’s renewed optimism,” Simon Maughan, strategist at Olive Tree Securities, said.

Jenkins, 51, has said he expects his plan to revamp the bank, to take five to 10 years and has told staff they should leave if they do not want to sign up to the new standards.

He has cut the average bonus for investment bankers to £54,100 (€62,870) for last year, down 17 per cent on the year and will pay £1.85 billion (€2 billion) in bonuses, down 14 per cent. Jenkins plans to focus investment in Britain, the US and Africa, and reduce the bank’s presence in Europe and Asia. He will scale back the investment bank’s equities and advisory businesses in Europe and Asia and refocus its retail businesses in Italy, Spain, Portugal and France on mass affluent customers.