Barclays to close tax advice unit
Published 09/02/2013 | 20:11
Banking giant Barclays is to close its tax avoidance unit.
The move is expected to be announced on Tuesday when the scandal-hit bank is due to deliver its annual profits and the long-awaited results of a strategic review.
The unit gave advice to large companies on how to avoid tax.
It is thought new chief executive Antony Jenkins will reveal his plans to repair the bank's battered reputation and overhaul its culture and practices following a string of damaging scandals.
He is expected to warn of pay cuts and a swathe of job losses, having told the Banking Standards Commission earlier this week he was "shredding" the legacy left by former boss Bob Diamond - who quit after the bank's £290 million Libor rigging settlement last year.
Mr Jenkins is expected to say on Tuesday: "There are some areas that relied on sophisticated and complex structures, where transactions were carried out with the primary objective of accessing the tax benefits. Although this was legal, going forward such activity is incompatible with our purpose. We will not engage in it again."
Mr Jenkins has already waived his bonus for 2012, saying it was "only right that I bear an appropriate degree of accountability" after a "very difficult" year for the group. But Barclays is set to reveal how much its wider bonus pool is for 2012 and what it will pay the 24,000 staff in its investment banking arm, around 9,000 of which are based in London.
Amid intense public and political pressure to rein in bonuses, the pot is likely to be sharply lower than the £2.2 billion set aside for 2011, which included £1.5 billion for Barclays Capital employees.
Mr Jenkins has already assured that bonuses have been slashed to take account of its mounting mis-selling compensation bill and the Libor fixing affair.
This week's additional £1 billion to cover mis-selling of payment protection insurance and interest rate swap products to small businesses resulted in another "material" cut to the bonus pot, he told the Banking Standards Commission.