21st Jan 2016 16:27
LONDON (Alliance News) - Jes Staley, the former JP Morgan Chase & Co banker, is wielding an axe over Barclays PLC' investment bank, cutting around 1,200 jobs, mostly in Asia, with the division set to report "broadly flat" income in 2015.
In his first major move since he was hired as chief executive last year to succeed Antony Jenkins - the retail banker tasked with cleaning up Barclays' reputation in the wake of a fine over the Libor rigging scandal in 2012 - Staley said nine offices across the investment bank's sprawling empire spanning will be closed.
The result will be an investment bank focused on the "home markets" of the UK and the US. In Asia, Barclays will serve clients with cross-border requirements from offices in China, Hong Kong, Singapore, Japan and India.
"With these actions, we are accelerating the investment bank strategy outlined in 2014, focusing on its core strengths and running the business for returns. We continue to build on the business's dual home markets in the UK and US and remain committed to a strong presence in Asia and EMEA, consistent with operating a leading global investment bank within the Barclays Group," Staley said in a statement.
Barclays is headquartered in the UK, but has a large investment banking operation in the US resulting from its purchase of Lehman Brothers assets there in 2008.
On being named Barclays' chief executive back in October, Staley set his sights on ensuring the investment bank becomes less hungry for capital and produces better returns.
In 2014, the division generated revenue of GBP7.59 billion, a 12% drop on the prior year. In the first nine months of 2015, the investment bank's revenue amounted to GBP6.11 billion. A flat outcome for 2014 revenue suggests fourth-quarter revenue of GBP1.48 billion, an 11% drop on the GBP1.67 billion seen in the corresponding quarter the prior year.
In May 2014, still led by Jenkins, Barclays set out a plan to reduce the group's overall reliance on the investment bank, with the UK and the US already identified as the two countries of major focus.
The strategy involved a reduction of the dominance of fixed income, currencies and commodities (FICC) in the division, a traditional profit driver for many investment banks, amid structural and cyclical challenges for that area of business. That was accompanied by a drive to prioritise equities, credit, some foreign exchange and interest rates within markets, and origination-led equity and debt capital markets advisory within banking.
Staley now wants to speed up the restructuring of the investment bank, with plans to shut down cash equity product provision in countries such as South Korea and Taiwan.
Shares in Barclays were up 2.3% at 186.20 pence on Thursday afternoon.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Barclays