[LONDON] Barclays is preparing to cut more than 200 jobs in its investment bank in the coming days as part of chief executive officer CS Venkatakrishnan’s plan to boost the profitability of the division.
Staffers in investment banking, global markets and research will likely be affected, according to people familiar with the matter, who asked not to be named discussing personnel. Managing directors will be the most senior roles affected, they added. The reduction represents about 3 per cent of the investment bank’s headcount.
The cuts are meant to give the bank more capacity to invest in priority areas, one of the people said. In markets, the bank has been focused on boosting its market share in European rates, equity derivatives and securitised product trading.
In investment banking, the firm has been looking bolster the revenue it generates from equity capital markets and mergers and acquisitions, in particular across the health care, industrial, tech and energy transition industry groups.
The move is not a sign that the bank is retrenching away from any products or asset classes, the person added. Although it’s prioritising growth elsewhere, Barclays has committed to its costly transatlantic investment banking model in the face of pressure from investors over the years.
“Like other banks, we regularly review our talent pool as part of our ongoing business operations to ensure continued investment in priority areas,” a Barclays spokesperson said in a statement. The lender made similar reductions just over a year ago.
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Cost cuts
Venkatakrishnan has been under pressure to boost returns across the investment bank, which consumes large amounts of capital compared with other, higher-returning parts of the business. He has said the division won’t be allocated any additional risk-weighted assets from the parent company in the coming years, even as it navigates higher capital requirements from global regulators.
The CEO set out a new strategy last year that anticipated about £2 billion (S$3.5 billion) of efficiency savings across the bank by 2026, helping to boost earnings and return £10 billion to investors.
Barclays’ investment bank is by far its largest division, generating £11.8 billion in revenue in 2024, up 7 per cent from a year earlier. The bank is known as a powerhouse in fixed-income markets – though it’s been investing heavily in its prime and equity divisions in recent years to catch up to rivals.
Many changes
As part of the investor update last year, Barclays said its work to gain share in European rates, equity derivatives and securitised products trading would help it boost revenue by £500 million by 2026. Meanwhile, the push to get back to the 4 per cent market share it last had in advisory and underwriting in 2019 was supposed to yield £700 million in income growth within investment banking.
To pull off those goals, the bank has been appointing key leaders and has made several high-profile hires. For instance, it added former Centerview Partners LLC partner Andrew Woeber as its global head of M&A in April and Royal Bank of Canada’s John Kolz joined in March to co-run equity capital markets globally.
The bank has seen its market share in investment banking inching upward after it had roles on deals including Alphabet Inc.’s US$32 billion purchase of Wiz and Sunoco LP’s acquisition of Parkland Corp. for about US$9.1 billion including debt. Within markets, revenue for the first three months of the year jumped 16 per cent as the firm’s stock traders posted their best quarterly haul in almost three years.
Investors seem to be happy with the bank’s progress so far, with shares up about 24 per cent this year. That’s better than the 8 per cent advance of the FTSE 100 index. BLOOMBERG
