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Barclays sale to Morgan `risks 600 jobs'

More than 600 jobs are at risk as a result of Barclays' decision to sell part of its global custody service to Morgan Stanley, banking unions warned yesterday.

The fears were voiced as Guardian Royal Exchange, the insurance group, said it was cutting 350 jobs as part of a restructuring of its area and branch network after the pounds 48m acquisition of Legal & General's commercial insurance operations in July.

Bifu, the banking union, attacked the insurance job losses as "arbitrary" and claimed the Barclays' job cuts would be a "devastating blow" to Trowbridge, the Wiltshire town where much of Barclays' custody business is placed.

Unifi, which represents three-quarters of Barclays' staff, said only 67 people involved in "front-end" relationship and client services departments were to be transferred to Morgan Stanley as part of the deal announced yesterday.

Many of these will have to relocate from Trowbridge to Morgan Stanley's London office at Canary Wharf, Unifi said.

The price of the deal, which has been the subject of much speculation in recent months, was not disclosed although Barclays said it would have "no material effect" on its accounts.

The transaction involves approximately $250bn of the assets currently administered by Barclays Global Securities Services. The combined global custody assets of the two businesses are expected to reach approximately $390bn, making it one of the largest in the world.

Under the terms of the deal Barclays will provide sub-custodial services to Morgan Stanley for 18 months after the deal is completed in the second quarter of 1997.

"This means the sub-custodial staff may only be required until the third quarter of 1998," Unifi said.

A spokeswoman for Barclays said the bank was hopeful of transferring staff to other positions.

"Our aim is to avoid redundancies, although there may well be job losses after two years," the Barclays spokeswoman said.

Jim Lowe, assistant secretary to Bifu, said he was pressing for a series of measures to be introduced at Trowbridge, from where Barclays has already transferred another part of its custody operation to Peterborough.