Barclays to slash jobs after suffering ‘reputational damage’
LONDON, United Kingdom(AFP) – Barclays will cut at least 3,700 jobs this year and slash costs, the scandal-hit bank announced on Tuesday as it also revealed that it had plunged into an annual net loss amid the Libor rate-rigging crisis.
The British bank said in a statement that it would “reduce headcount by at least 3,700 across the group, including 1,800 in the Corporate & Investment Bank and 1,900 in Europe Retail and Business Banking.” Barclays employs 140,000 staff.
The bank reported a loss after tax of 1.04 billion ($1.63 billion, 1.22 billion euros) for 2012 compared with a net profit of ú3.0 billion in 2011 – news brushed aside by the market as Barclays’ share price soared on Tuesday.
A woman uses an ATM machine outside a Barclays bank branch in central London, on February 11. Barclays will cut at least 3,700 jobs this year and slash costs, the scandal-hit bank announced on Tuesday as it also revealed that it had plunged into an annual net loss amid the Libor rate-rigging crisis. AFP
“There is no doubt that 2012 was a difficult year for Barclays and the entire banking sector,” said chief executive Antony Jenkins, who was brought in to shake up the bank in the wake of the Libor scandal that has rocked other lenders.
“The behaviours which made headlines during the year stemmed from a period of 20 years in banking in which the sector became too aggressive, too focused on the short-term, and too disconnected from the needs of customers and clients, and wider society,” he said.
“Barclays was not immune from the impact of these trends, and we suffered reputational damage in 2012 as a consequence. Change is needed both in our industry and at Barclays,” Jenkins added in a statement.
Jenkins ordered a strategic review after replacing Bob Diamond as chief executive five months ago and after the bank was fined $450 million (336 million euros) by British and US regulators for attempted manipulation of Libor and Euribor interbank rates.
As well as deciding to scrap thousands of jobs, Jenkins on Tuesday said that he would slash the bank’s costs by 1.7 billion in 2015.
Barclays said that as a result of the job cuts, it would incur a restructuring charge of close to 500 million in the first quarter of 2013.
It added that going forward the bank would focus its investment projects in Britain, the United States and Africa, “whilst maintaining an appropriate presence across Europe and Asia.”
Barclays would set out also to “provide greater disclosure and transparency” around its financial performance.
Earlier this month, Jenkins announced that he would give up his 2012 bonus, reported to have been at least ú1.0 million, because of the bank’s problems.
Barclays last week said it had set aside another 1.0 billion to cover compensation for mis-selling credit insurance and interest rate hedging products, which comes on top of the Libor fallout.
In another blow, Barclays recently revealed that Britain’s Serious Fraud Office was probing payments made to Qatar Holding, which the bank tapped for funds at the height of the 2008 financial crisis to avoid part-nationalisation.
