Barclays, Britain's third-biggest lender, set out plans to revive its British banking business, aiming to increase annual UK profits by up to £700m by the end of 2007.
Roger Davis, its head of UK banking, said yesterday that the bank would use cost-savings to reinvest in the business and boost sales. It aims to shave up to £500m from the UK business's annual costs of £2.9bn.
In January, Barclays merged Mr Davis's business banking unit with the British retail arm, which is expected to generate some of the cost-savings. The British business is Barclays' biggest and provides about half of group profits but it is also the slowest growing. Mr Davis said: "Business banking has great momentum. The opportunities to grow revenue in retail are significant."
The bank will try to improve services, target customers in a better way and revamp branches rather than cut prices. It faces price competition from HBOS and Spain's Santander Central Hispano, which is in the process of buying Abbey National.
Some analysts are concerned that competition would reduce banks' profit margins too much, but Mr Davis was not worried. "We have had to factor margin assumptions into our plans, but I am not a subscriber to the view that margins in this industry are about to collapse," he said.Reuse content