Barclays Capital to axe 100 investment bankers

Barclays Capital is cutting about 100 investment banking jobs, including more than 20 in leveraged finance, one of the businesses worst hit by the credit crunch.

BarCap held meetings with every member of its UK leveraged finance team yesterday to tell them whether they were being considered for redundancy. Those whose jobs were under threat were told they could pick up belongings before their access to the buildingwas ended.

The meetings covered financial sponsors, corporate leveraged finance and leveraged products teams and took in all staffing grades.

About 20 cuts are understood to have been made in the leveraged finance team, which has about 90 members. The rest of the job cuts will be made elsewhere in investment banking and in IT support.

A BarCap spokesman declined to comment, but a source familiar with the business said the bank was not getting out of the leveraged finance business.

The leveraged loan market boomed until last summer as private equity firms took advantage of cheap credit and willing lenders to do bigger and bigger deals funded by debt. But since confidence in all debt products crashed in August banks have been left with billions of dollars of loans on their balance sheets that they would previously have sold on to investors.

Barclays was one of the biggest players in the market, providing some of the £9bn of debt backing Kohlberg Kravis Roberts' acquisition of Alliance Boots.

BarCap's boss, Bob Diamond, told investors last month that he was happy with the quality of the leveraged loans on his books, and that the bank would not be forced into cut-price sales.

Banks have been cutting back their leveraged finance departments, with Citigroup, Morgan Stanley and UBS among those that have shed staff.

Mr Diamond has said that BarCap's headcount will remain flat or rise slightly this year. With gloom about mass City job cuts spreading, the prediction is relatively upbeat, based on Mr Diamond's belief that businesses such as commodities will keep growing. But it marks an end to the business's breakneck growth of recent years.