Barclays will axe thousands of jobs and raise bonuses for its investment bankers this year, the British lender announced yesterday after posting a return to annual profits.
Chief executive Antony Jenkins said that between 10,000 and 12,000 jobs would go worldwide this year. Jenkins told a conference call with media that about 7,000 jobs would go in Britain, out of a global workforce of about 139,000.
Barclays increased the money available for staff bonuses by almost 10% to £2.378bn ($3.907bn, €2.858bn).
While net profits rose, the investment bank unit reported a loss in the fourth quarter, while pre-tax earnings slumped as Barclays factored in restructuring costs and litigation charges.
Barclays has been hit by massive compensation payouts to customers who were mis-sold insurance policies.
Barclays, which is Britain’s second biggest bank after HSBC, announced yesterday that a strong performance by its retail arm helped lift group profit after tax to £540mn last year, compared with a net loss of £624mn in 2012.
Retail banking veteran Jenkins replaced Bob Diamond, who stepped down as chief executive of Barclays in July 2012 after the bank was fined £290mn by British and US regulators over the attempted manipulation of the key interbank Libor interest rate.
US national Diamond was renowned for overseeing a culture of high bonuses at Barclays’ investment banking division, which he headed before taking over as chief executive.
Barclays took the unusual step of posting its headline and adjusted pre-tax profits on Monday, a day earlier than scheduled, after figures were leaked to media.
While statutory pre-tax profits surged last year, adjusted earnings dropped and missed the bank’s own forecast amid the group’s cost-cutting.
Reported profit before tax hit £2.9bn in 2013, while adjusted pre-tax profit, which the bank said took into account exceptional charges, slumped to £5.2bn.
Barclays has set aside an additional £331mn in provisions to cover litigation and regulatory charges.
And last year it was forced into a huge £5.8bn shares sale, or rights issue, to meet regulatory demands to strengthen its capital buffers.
Britain’s data watchdog on Sunday launched a probe after confidential files relating to Barclays customers were allegedly stolen then sold on to rogue brokers.