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View the article online at http://citywire.co.uk/wealth-manager/article/a750143

Barclays resembles the Emirates stadium

by Dylan Lobo on May 08, 2014 at 12:23

Barclays resembles the Emirates stadium

‘Barclays may soon resemble the Emirates Stadium with 20 minutes left to play  - there will be over 20,000 empty seats.’

This somewhat unflattering reference to Barclays and possibly Arsenal football club, came from Investec Securities analyst Ian Gordon on news the lender was planning to cutting 14,000 jobs this year, half of which will be in investment banking. In total 19,000 jobs will go by 2016, 10,000 of which will be in the UK.

In a huge strategic overhaul of its business, Barclays is also planning to shut most of its Asian operations created by former chief executive Bob Diamond.

It its new form the bank will focus on four key areas – personal and corporate banking,  which is home to its wealth business and Barclaycard and Africa bank, along with a smaller more focused investment bank offer banking services, equities  and ‘certain macro products’.

‘This is a bold simplification of Barclays. We will be a focused international bank, operating only in area where we have capability, scale and competitive advantage,’ Barclays chief Antony Jenkins told the stockmarket.

Drastic action was needed after a dreadful trading update earlier this week underlined the slump in its investment division.  

Sarcasm aside, the news prompted Gordon to reiterate his bullish stance on Barclays as he issued a fresh buy note with a 243p price target. At 12pm shares had gained 4.9% to stand at 255p.

‘Barclays is already low-risk profitable bank, but today’s “reset” is about rightsizing the bank to reflect a smaller addressable investment bank revenue pool and to deliver improved/sustainable returns,' Gordon said. 

Citi is more bullish, slapping a £3.15 price target on Barclays as it described the strategic update as ‘sensible; not sensational’.

‘We believe the revised strategy is sensible and should be well received,’ Citi analysts Andrew Coombs and Ronit Ghose said.  

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3 comments so far. Why not have your say?

Pagan Rites

May 08, 2014 at 15:47

So nobody could foresee the drop in revenue from that division but as soon as it happens the knee jerk reaction is to cull. Never has the phrase Lions lead By Donkeys been so apt. Its not just this bank either they all seem capable of wielding the axe to achieve a shareholder outcome whilst creaming off as much personal benefit as possible and holding positions beyond their competence, The only real achievement being to increase the unemployment figures. Yet within 2/3 years or so they will be looking for mugs to join them when they realise there are $$$£££s profit to be made again, and without apology or any conscience whatsoever they will repeat the cycle over and over again. One day soon they will run out of real experienced workers but who cares when you can cripple corporations and get remunerated handsomely whilst in situ, and receive huge payments for leaving the mess behind only to begin it again with another. Even a year 6 child could acknowledge this as the definition of stupidity.

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Pagan Rites

May 08, 2014 at 16:01

Not to mention the corporate and market bull..... "a reset " "rightsizing" "bold simplification" fantastic but isnt it about the thousands of families about to be affected financially. But hey, just keep playing with words and trying to find new words to explain a corporate cock up that means thousands are made redundant I am sure that's well received by those it impacts I am sure they are having a party tonight as the markets have seen it as a positive move. These analysts like the met office more often wrong than right but never openly admit it the best carpet sweepers in the world....at least the first four letters of analyst adequately sums them up.

"Barclays is already low-risk profitable bank, but today’s “reset” is about rightsizing the bank to reflect a smaller addressable investment bank revenue pool and to deliver improved/sustainable return"......this guy must be a riot at a party - whatever happened to plain understandable English or is there an award for utter bo****** , if there is my money is on him. Dear God are we all so mentally dead we should find this as the norm and acceptable. Perhaps its because of people like this we have situations like this.

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S McGee

May 09, 2014 at 08:43

Investec analyst enjoys Barclays redundancies !

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