Barclays set to axe 3,700 jobs
Barclays boss Antony Jenkins has revealed plans to axe at least 3,700 jobs and said there will be "no going back to the old ways" despite handing out £1.85 billion in bonuses to staff.
The scandal-hit bank risked courting further controversy over banker pay as it said the bonus pool will mean each employee gets £13,300 on average, including £54,100 for investment banking staff.
Mr Jenkins insisted the group was "changing the way we do business" as he unveiled the results of a strategic overhaul to repair the bank's battered reputation after a string of scandals.
He is shutting the bank's controversial Structured Capital Markets tax advisory division and said 1,800 jobs would go in corporate and investment banking and another 1,900 across its European retail and business arm under plans to slash costs by £1.7 billion.
Around 1,600 investment banking jobs have already gone, but Barclays said "very few" of the overall staff cuts will impact UK staff. The bulk of the jobs cull will impact Asian and European equities departments and the European retail arm, with losses in the "low hundreds" across the UK.
Mr Jenkins, who was appointed in August after Bob Diamond quit in the wake of the bank's £290 million Libor rigging settlement, insisted bonuses had been reduced after last year's series of reputational blows.
The overall bonus pool was lower than the £2.2 billion handed out last year and Mr Jenkins said the bank's compensation ratio - pay as a proportion of revenues - had fallen to 38% from 42% in 2011 and would fall further to the "mid-30s" as part of the overhaul.
He announced he was waiving his bonus for 2012 earlier this month, but said it was not in the interests of investors to "radically reduce" pay and bonuses if it could lead to the loss of talent.
Nearly £2.5 billion of cash set aside to cover mis-selling compensation claims contributed to a plunge in pre-tax profits to £246 million in 2012 from £5.9 billion the previous year. The bank had £1.6 billion to cover claims relating to payment protection insurance and £850 million for interest rate swaps sold to small businesses.
Barclays said profits rose 26% to £7.05 billion on an underlying basis, with mis-selling provisions stripped out and not including movements in the value of its own debt. Mr Jenkins admitted this year's results may "moderate" after the restructuring, which will cost it nearly £500 million in the first quarter of 2013 alone and £2.7 billion in total over the next three years. The group said it had seen a "good" start to the year so far, but Mr Jenkins braced investors for revenues in the low single digits over the years ahead.