McFarlane signals plan to ‘streamline’ Barclays

Barclays are planning to speed up its cost-cutting drive by axing more than 30,000 jobs, according to reports. Picture: AP
Barclays are planning to speed up its cost-cutting drive by axing more than 30,000 jobs, according to reports. Picture: AP
Share this article
Have your say

THE new executive chairman of Barclays yesterday branded the bank as “far too hierarchical and bureaucratic”, as he signalled a step-change in the sale of assets and costcutting.

Scots-born John McFarlane, who has taken temporary control since chief executive Antony Jenkins was ousted earlier this month, said he planned to cut the bank’s cost/income ratio to “mid 50s” per cent from 70 per cent in the first half of 2015.

I would slow rather than accelerate [branch closures]

John McFarlane

It is expected to involve significant job cuts at Barclays, already in the middle of a three-year plan to shed 19,000 staff by the end of 2016, with some reports saying 30,000 posts could go.

It came as Barclays posted a 25 per cent lift in pre-tax profits to £3.1 billion for the first six months, up from £2.55bn in the same period last year.

Of the latest redundancy speculation, the chairman said: “We’ve actually not made that decision and we have not confirmed any such number. It is fair to say … the company will get smaller in terms of headcount but … at this point in time we don’t know what that is.”

McFarlane, who oversaw a similar overhaul at insurer Aviva after its chief Andrew Moss was pushed out, also said he planned to cut non-core assets at Barclays to £20bn by end-2017.

It had £57bn of these at the end of June and had previously planned to cut that figure to £45bn by the end of 2016.

The chairman, who will remain in charge until a successor to Jenkins is found, said Barclays had three core markets: Britain, the US and South Africa.

He said the bank needed to scale back or exit countries where it did not have “a clear competitive advantage in specific products or markets”.

Assets to be sold include derivatives products and the bank’s retail operations in Italy and Portugal. In addition, Barclays needed to have “much more streamlined processes” internally to help speed the growth in earnings, return on equity and capital generation, he added.

The bank closed just under 100 branches in Britain in the year to end-June, or 6 per cent of its network. However, McFarlane hinted this process may slow.

“I would slow down bank closures rather than accelerating them. I am particularly hostile to closing the last bank in town,” he said.

Barclays set aside £1bn in the first six months to compensate customers over scandals such as payment protection insurance (PPI) mis-selling. This included an £850 million charge in the second trading quarter, including £600m for PPI. It takes Barclays’s bill on the latter to £6bn.

The bank said it would maintain its dividend at 6.5p this year, the same as it paid in 2014.

• Banks are failing to meet new standards for compiling market benchmarks despite the fines imposed over the Libor and foreign exchange scandals, the financial regulator has said.

A review by the Financial Conduct Authority said the consistency and speed of the application of new standards on benchmarks in the industry was “disappointing”.