Job losses loom at Barclays after fall in profits

TOUGH trading in parts of its investment bank saw first-quarter profits at Barclays fall 5 per cent, as finance director Tushar Morzaria warned that Barcap’s weakness had continued into April.

Antony Jenkins: Could announce more lay-offs. Picture: Contributed

The investment bank saw 450 previously flagged redundancies in Q1, amid rising speculation that group chief executive Antony Jenkins will announce more lay-offs in Barcap in a strategic review tomorrow.

Jenkins said in today’s statement that the review “will address issues underlying the performance challenges we have recently experienced, including positioning the investment bank for the new operating and regulatory environment”.

Morzaria said that the 49 per cent slump in profits to £668 million in the investment bank followed a 41 per cent crash in income in fixed income, currencies and commodities. Corporate finance and equities had performed better, he said.

Asked about any potential additional job cuts in Barcap, Morzaria said: “We are not announcing any brand new redundancies here and now today.”

The performance contributed to Barclays’s group underlying pre-tax profits dropping to £1.69 billion. Shares in the bank closed down 13.5p, or 5.2 per cent, at 245p.

Jenkins said the first quarter had seen a strong performance from the high street, cards and business banking divisions.

Bad debts fell, and further cost reductions meant underlying operating expenses were at their lowest since 2009.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: “The outcome of the quarter is largely a continuation of the themes outlined at the full year numbers, with Thursday’s strategy announcement likely to be rather more consequential.”

It has been reported that the group may create a “bad bank” or non-core unit as it seeks to quit part of its fixed-income business and loss-making European branch network.

Barclays made no new provisions for compensating customers who were mis-sold payment protection insurance (PPI), and it still has £689m set aside for potential redress.