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Barclays shares power ahead on sweeping bonus and job cuts

by Sarah Miloudi on Feb 12, 2013 at 07:28

Barclays shares power ahead on sweeping bonus and job cuts

Barclays shares have powered ahead after the bank said it would cut at least 3,700 jobs as part of Antony Jenkins' drive for change.

At 10am, shares in the bank traded at 312.p, a far cry from their 139p price at the peak of the Libor furore.

Following a strategic review, Barclays said it would slash its headcount and cut costs by £1.7 billion.

Some 1,800 posts will go in the bank's corporate and investment bank division and 1,900 from its Europe retail and business banking arm.

The reductions are expected to result in a restructuring charge of close to £500 million, and elsewhere, more money would be saved and its critics appeased by a 'significant' decrease in Barclays' bonus pot.

For 2012 the average bonus per employee was down 13% year on year to £13,300 and within its investment bank the typical bonus award was cut by17% to £54,100.

Jenkins (pictured), who took over as chief executive following Bob Diamond's departure at the height of the Libor scandal, said he wanted to 'set a new course' for the bank, prompting him to spearhead a drive for change.

'Barclays is changing. We intend to change what Barclays does and how we do it and have set out clear commitments against which our progress can be measured,' he said.

Barclays unveiled news of the job cuts in a statement about its strategic review, previously announced by Jenkins, and issued it this morning to coincide with the bank's final results.

2012 has undeniably been a difficult year for Barclays, involving a probe by the Financial Services Authority (FSA) into its 2008 fund raising and loans to Qatar, the Libor scandal and criticism over its corporate and bonus culture more broadly.

But despite these challenges, Barclays' adjusted pre-tax profits for 2012 were up 26% on 2011 to £7.1 billion, with corporate and investment banking profits rising 46% and wealth management profits jumping 52%.

10 comments so far. Why not have your say?

JM Keynes

Feb 12, 2013 at 08:30

Everyone was slapping the FSA on the back for its historic fine of £290m levied for LIBOR fixing (probably been going on for years). HM Treasury wasdelighted with the windfall - which was not, of course, used to reduce the financial burdens of regulation on our sector.

However 3,700 job losses at Barclays are not a consequence?

When will someone realise that the banks and financial services are the jewel in the UK economy's crown?

Our competitors in Frankfurt will be rubbing their hands, because the army of regulators in this country will not stop until the sector is dead and buried.

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Paul Barnard

Feb 12, 2013 at 08:40

You really think that the likes of Barclays are the"jewel in our crown"? Bit like saying that the Krays were the pride of London.

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complacency rules

Feb 12, 2013 at 08:53

Barclays has made a start, but only a start, on regaining its reputation. However, bonuses should not be paid (after all they are all paid huge salaries) until the job is done. I always understood that bonuses were based on results and not necessarity financial results. Whent the results start coming in then the bonuses can start. It is a pity that the new culture within the Bank is being lead by Jenkins who was so involved with PPI within Barclaycard. The cynic in me asks whether he is just hitching his cart to which ever band wagon is moving at the time.

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Jonathan Kirby

Feb 12, 2013 at 09:01

Lets hope that Sants bonus is cut too.

Come to that they could save a few million adding him to the list.

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Feb 12, 2013 at 09:08

Banks, especially the large ones, are insanely overstaffed. Key is cutting the right people out in over-complex management structures and too often they are the ones making the firing decisions....

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complacency rules

Feb 12, 2013 at 09:29

it is my understanding that bonuses are an allocation of profits. Barclays are distributing more in bonuses than they earned in profits. What possible justification is there for this, and as always it is the long neglected shareholder who suffers.

Can we be confident that all the provisions for past scandals are now accounted for? Are we confident that further scandals will not come to light?

Does the new 'openness' within Barclays just mean that they are going to find better ways of covering things up?

Does anyone belive that it can change it's spots?

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Michael Brown

Feb 12, 2013 at 10:06

@JM & PB

Jewel is possibly an overstatement but we have to consider one very important item. Financial Services is one of the areas that we are very good at. Yes there were issues and some still coming out of the woodwork. If one looks at RBS it was 25 staff out of 130K of them that caused their LIBOR issue.

The PPI issue were every sale was a miss sale beggar’s belief. I know people who claimed on their PPI policy and now find they are to get compensation for a bad sale!

I am really fed up with the politicians blaming the bankers now. They let go of the reins via the Labour party and this is the consequences of the very lose reins. One should really consider who they were lending to in many cases - the general public.

And yes some of the sales tactics used for customers overall were well over the line which has been redrawn.

You like me have complaints from customers that they cannot get mortgages as the banks now have to have capital adequacy and move from over 50% of the funds from money markets to the savers within the nation. We cannot have it both ways, one has to go and the one that has gone is the money market way to attain cash.

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Ewart Matthias

Feb 12, 2013 at 10:25

I can't get over the fact that 2012 saw Barclays investigated by the FSA, fined and then the former head of the FSA move to a role within it???

Am I missing something or maybe just cynical?

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Jonathan Kirby

Feb 12, 2013 at 11:22

@ Ewart

Not cynical, just realistic

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Usually found sitting on the fence

Feb 12, 2013 at 16:17

@ Ewart - Everyone would raise an eyebrow or tut if the head of the Metropolitan police investigated a billionaire for, let's say murder, and then turned up in that same billionaire's employment. So not surprising that you can't get over the fact.

What amazes me are that the announcement to the market that 3000 staff are to lose their job makes them happy and that the bank is going to cut costs of £1.7b, which makes me wonder why they had been wasting this mobey before? Surely that waste should mean much much smaller bonuses!!! Grrrrrr...

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