British banking giant Barclays is planning a sweeping overhaul of its investment banking business in order slash rising operational cost. The move is expected to result in thousands of job cuts.
It is believed that the London-based bank will reveal its strategy in summer, when the review is expected to complete.
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Media reports suggests that the review could result in possible departure of the co-heads of the investment bank, Tom King in the US and Eric Bommensath in Europe.
The British bank aims to transfer its capital of investment banking unit to more profitable business areas, including Barclaycard and UK mortgage lending.
The decision to revamp the business comes after the investor expressed unhappiness on the way, the bank decided to increase bonus payments by 10% to a total of £2.4 billion for 2013, despite posting one-third fall in its pre-tax profits.
However, Barclays CEO Antony Jenkins defended bank’s plan to increase bonuses, claiming that without increasing bonus, it would be impossible to retain the investment bankers and their departure will adversely affect its investment banking business.
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By GlobalDataNot only Barclays, but other global banks too are decreasing their fixed income operations and allocating capital to equities or advisory units, or into other areas of commercial banking.
In February 2014, Barclays announced that it will eliminate up to 12,000 jobs this year, including 7,000 in the UK, which equates to nearly 9% of its total workforce.
