Barclays to axe at least 3,700 jobs but will still pay £1.85bn in bonuses to staff

Scandal-hit banking giant Barclays today said it was axing at least 3,700 jobs under a strategic overhaul, but revealed it was paying £1.85 billion in bonuses to staff (PA)

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.