Diamond: aiming to cut £1bn of annual costs
Barclays is set to cut about 3,000 jobs this year to reduce costs after a drop in bond trading and an insurance mis-selling charge cut first half profits by a third.
The British bank’s performance was more resilient than rivals, however, as bad debts tumbled and it kept costs steady.
Chief executive Bob Diamond, the American who built investment banking unit BarCap into a debt market powerhouse over the previous decade, said Barclays had cut 1,400 jobs during the first half and the tally was likely to rise to about 3,000 by the end of the year.
“We haven’t set specific headcount numbers, but I would expect the trend in the first half to continue and I think it would be likely to increase,” Diamond said.
The staff cuts amount to about 2% of Barclays’ total workforce of 146,100.
Barclays joins a growing line of banks, including HSBC, Goldman Sachs, Credit Suisse and UBS to slash thousands of jobs in recent weeks.
Pre-tax profit for the six months to the end of June was £2.6bn ($4.3bn), down 33% from a year ago but above the average forecast of £2.4bn among analysts polled by the company.
Diamond is aiming to cut £1bn of annual costs and reckons he could even double that goal, as well as generate more than£6bn per year of extra revenue by 2013 under a revamp plan.
The bank’s return on equity improved to 9.1% in the first half from 6.9% a year ago. Diamond is targeting a level of 13% by 2013.
BarCap’s income fell to 2.9bn in the second quarter, down 14% on the first quarter, but BarCap’s co-CEO Rich Ricci said he remained confident it can hit its targeted £3.5-3.6bn of quarterly income in normal market conditions.