Barclays to axe at least 3,700 jobs but will still pay £1.85bn in bonuses to staff
Tuesday 12 February 2013
Barclays chief executive Antony Jenkins said today only just over half of the 75 businesses he inherited from Bob Diamond had come through his five-month review of the bank’s strategy with a clean bill of health.
Diamond quit last year over the Libor rigging affair which saw Barclays fined £290 million in the summer. Jenkins, the head of retail banking, took over in the autumn. He has pledged to clean up the bank and change its culture after it has been rocked by scandals.
Jenkins said he would close four businesses including the notorious tax avoidance unit, structured capital markets. He also said he would slash 3,700 jobs, split between the investment bank and Barclays’ retail and business banking operation in Europe.
A further 32 businesses will be shaken up because they do not meet Jenkins’ criteria, either on strategic importance, reputational damage limitation or potential profitability.
“It will take years before people change their impression of us,” he said today. “I’m not daunted by that. I am determined that no one should be able to question our intent or our commitment to the path that I have set out.”
Barclays’ pre-tax profits rose 24% to £7.5 billion in 2012 — before taking off the £2.45 billion the bank put aside for mis-selling payment protection insurance and interest rate hedges.
Investment bank profits rose 37% to produce well over half the total at £4.06 billion. But bonuses at the investment bank were cut by 20% from £1.7 billion to £1.4 billion and Jenkins said that, having cut the ratio of pay across the group from 42% to 38% last year, he still wanted to bring it down to “the mid-30s”.
The job cuts — of which only “a couple of hundred are in London” — are part of Jenkins’ plan to slice £1.7 billion out of Barclays’ costs by 2015. The cuts will cost £500 million this year.
The dividend for the year goes up from 6p to 6.5p, and Jenkins said that from 2014 he planned to speed up dividend payments, aiming at handing 30% of earnings to shareholders. That is in response to criticism that since the financial crisis Barclays has paid its investment bankers more in bonuses than it paid investors in dividends.
Asked if Barclays could face another major scandal, Jenkins said: “I think we have got a pretty good line of sight on the big issues. There is always the possibility there is something else we don’t know about but I think it’s a possibility, not a probability.”
Barclays shares gained more than 4%, rising 12.36p to 313.86p in early trade on Tuesday.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
Shock poll shows voters believe Ukip is to the left of the Tories
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
New era of cheap oil 'will destroy green revolution'
Ukip founder Alan Sked and Nigel Farage 'begged Enoch Powell to stand as a candidate'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
iJobs Money & Business
£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...
£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...
£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...
£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...