May 8, 2014, 3:27 AM
- Barclays (BCS) intends to slash 19,000 jobs over the next three years, including 7,000 at its investment bank, where operating profit halved in Q1.
- Barclays will cut 14,000 positions this year, above an expected 12,000-14,000.
- The U.K. company also plans to create a "bad bank" that will incorporate £115B ($195B) worth of risk-weighted assets from the investment bank, as well as the firm's retail banking operations in Italy, France, Spain and Portugal. The aim is for the investment bank to account for no more than 30% of the company's risk-weighted assets vs 50% now.
- Barclays will give greater focus to its retail activities in Britain, its Barclaycard credit card division, and its African business.
- The company will book £800M in costs as part of the overhaul, adding to £2.7B that was announced in February 2013.
- However, within two years, Barclays aims to increase its dividend payout to up to 50% of adjusted earnings vs current guidance of 40%.
- Shares are +3.4% in London. (PR)
May 6, 2014, 11:12 AM
May 6, 2014, 7:09 AM
- Behind the decline in income at Barclays (BCS) in Q1 was a 49% dive in income at the investment bank as business evaporates in fixed income, currencies, and commodities. Traditionally, the largest source of revenue for the investment bank, FICC income fell 41% to £1.2B.
- "A lot weaker than expected," says Shore Capital's Gary Greenwood of the FICC number. "The key questions are: What are they doing with their investment-banking business and how are they going to stem these declines?”
- Later this week, CEO Antony Jenkins will present details of an overhaul of the investment bank. Ahead of the presentation has been a rash of top-level management exits.
- "We are obviously going through a number of changes as part of our strategic review and that may or may not have prompted some people to move on,” says Finance Director Tushar Morzaria on a reporter conference call. He notes the bank's difficulties in FICC have continued in Q2.
- Shares -3.1% premarket
- Previously: Barclays reports Q1 results
- Previously: More high-level departures at Barclays
May 6, 2014, 6:47 AM
May 5, 2014, 5:30 PM
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May 5, 2014, 7:09 AM
- The news continues to fly fast on Barclays (BCS) amid the strategic review of its investment bank which is to be unveiled on Thursday. The weekend's news:
- Investment banking chief Ros Stephenson is joining UBS, where he'll be global chairman of corporate client solutions.
- The bank's head of M&A - Paul Parker - is expected to quit ahead of Thursday's presentation, bringing to four the number of high-level bankers exiting ahead of the big day. A source, reports the FT, says Parker - a former Lehman banker - is being eased out as part of the management changes.
- The bank may put its retail operations in continental Europe up for sale, reports The Telegraph.
May 2, 2014, 3:42 AM
- Goldman Sachs (GS) and Morgan Stanley (MS) are on a Fed list of 15 U.S. and foreign financial firms that "may pose elevated risks to U.S. financial stability" and so will receive extra supervision by a cross-disciplinary special unit called the Large Institution Supervision Coordinating Committee.
- Other firms on the list include JPMorgan (JPM), Bank of America (BAC), AIG (AIG), GE (GE), Citigroup (C), Wells Fargo (WFC), State Street (STT), Prudential Financial (PRU), Barclays (BCS), Credit Suisse (CS), Deutsche Bank (DB) and UBS (UBS).
- As a major clearing and custody bank, Bank of New York Mellon (BK), will also receive the extra attention.
May 1, 2014, 10:43 AM
- Flushing Financial (FFIC +1.8%) is upgraded to Buy at Guggenheim.
- BofA Merrill Lynch upgrades National Bank of Greece (NBG +1.3%) to Neutral.
- Barclays (BCS +1.3%) is upgraded to Buy amid its plan to set up a “bad bank”.
- HSBC upgrades ING Groep (ING +0.1%) to Neutral.
- Morgan Stanley upgrades Synovus Financial (SNV +0.5%) to Equal Weight with a $3.30 PT.
- Provident Financial Holdings (PROV +0.5%) is upgraded to Buy at Sandler O'Neill after posting Q1 results.
Apr. 30, 2014, 7:10 AM
- Continuing restructuring moves, Barclays (BCS) plans to set up a bad bank to hold units designated as part of its "exit quadrant," reports Bloomberg, and has chosen co-chief of the corporate and investment bank Eric Bommensath lead the unit. Currently serving alongside Bommensath as co-head of the investment bank, Eric King will take over as sole leader. Among the businesses in the bad bank will be the commodities division.
- Noting a number lenders have set up these bad banks in the hopes investors will look past non-core assets, analyst Simon Maughan, reminds most "are not fooled by this."
- Barclays management - recently rewarded with large bonuses amid sliding profits - is under pressure to do something to earn its keep, and is set to unveil a strategy for the investment bank on May 8. Yesterday, it announced its U.S. chief Skip McGee was stepping down, effective today.
Apr. 29, 2014, 8:42 AM
- Currently CEO of Barclays Americas (BCS) Skip McGee is stepping down tomorrow. His exit comes as the bank - responding to new regulations - sets plans to merge all of its U.S. business units into a new holding company over the next two years.
- Currently Global Head of Client Capital Management, Joe Gold has been appointed to a restructured role as CEO of the Americas, where he'll be reporting to co-CEOs of the corporate and investment bank Tom King and Eric Bommensath.
- McGee was one of the Barclays execs who raked in those big 2013 bonuses which so upset shareholders because they came as profits fell. The board's reason for the bonuses: Employee retention.
Apr. 29, 2014, 8:03 AM
- Among the severe scenarios under which U.K. bank balance sheets will be tested for are a 35% fall in house prices, a sharp rise in interest rates over three years to 4%, GDP slumping 3.5% below its current level, and an unemployment rate peaking at 12%.
- Among those subject to the test: HSBC, RBS, BCS, LYG.
- The exams are being run alongside European-wide stress tests, with results expected to be published in Q4.
- Even banks who "pass" the test could be requested to boost their capital, warns the BOE.
Apr. 28, 2014, 9:12 AM
- The U.K.'s Serious Fraud Office says the three - all of whom currently live in the U.S. - face charges of conspiracy to defraud as part of its investigation into the manipulation of Libor. They're set to appear in U.K. court next month.
- No further details were released by the SFO and lawyers for the three haven't yet responded to requests for comment.
- The SFO charged three other former Barclays (BCS) employees two months ago. Today's charges brings to 12 the total number of bankers facing criminal charges in the U.K. over Libor.
Apr. 24, 2014, 9:32 AM
- "Bonuses up, profits down. Not a headline we would have chosen," said Barclays (BCS) Chairman Sir David Walker at the bank's heated annual meeting today. The contentious action comes following the decision to boost the bonus pool by 10% last year despite a fall in profits. Walker contends to increases were necessary to prevent an exodus of key investment bank staff.
- "Our business was attacked very aggressively by competitors, particularly in the US,” he said, noting one case of a U.S. bond trading desk where two-thirds of the staff and two co-heads threatened to leave.
- "We are paying for Manchester United but we are getting Colchester United," says one small shareholder, summing up the feeling in Royal Festival Hall today.
- Just before the annual meeting got underway: Barclays reports "significant" fall in fixed-income revenue
- Nevertheless, it's a bull market. BCS +0.9% premarket
Apr. 24, 2014, 5:35 AM
- Barclays (BCS) expects to report a "small reduction" in Q1 adjusted pretax profit due to a "significant" drop in revenue from the fixed-income credit and commodities (FICC) operations at the company's investment bank.
- CEO Anthony Jenkins said the decline reflects "difficult market conditions and a strong comparative performance for Q1 last year."
- Barclays' FICC woe echoes the sharp falls in revenue that JPMorgan, Goldman Sachs and Citigroup have suffered at their respective operations.
- However, Barclays' cost-cutting program is beginning to show a "material benefit," Jenkins said.
- Barclays disclosed the information prior to its annual meeting today.
- Shares are +1.1% premarket.
Apr. 23, 2014, 8:08 AM
- Barclays' (BCS) European FICC business would be the hardest hit, says the team, with about 5K job losses. An overall investment bank cut of 7.5K jobs would equate to about 30% of the unit's employees.
- "The U.S. broker-dealers have been far more proactive in attacking this situation than the European peers ... It has to be cross-sectors, trading desks not only commodities, as the very risk-taking nature of the business has fundamentally changed and is not reflected in people stacks."
- FICC revenue fell 17% in 2013, and Bernstein calls it the best thing that could have happened to strategic investors locked in to the company as it "finally pushed management to put on a structural lens to solve a problem that was thought of as cyclical till now."
- Bernstein estimates FICC income will be in the £4.5B-£5.5B range over the next three years, down from the £7.8B average from 2009-2012.
Apr. 21, 2014, 9:01 AM
- Part of an effort to shrink the investment bank, improve ROE, and please regulators, Barclays (BCS) will sell or exit trading in base metals, energy, and agricultural products and fold its precious metals business into its currency trading unit, reports the WSJ. Martyn Whitehead - head of metals and mining sales and Barclays' representative on London's gold fixing panel - will exit as part of the changes.
- The leak comes ahead of a May 8 presentation at which the bank will detail to investors how its plans to remake its investment bank.
- The move isn't a huge surprise, and Barclays won't be the first to exit the high (capital) cost, low-margin business. Earlier this year, the bank shut down its U.S. and European power trading desks.
- Last week: Barclays CFO Tushar Morzaria tells investors the bank doesn't yet have a plan in place for the investment banking unit.
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Barclays PLC is a financial services provider engaged in personal banking, credit cards, corporate and investment banking and wealth and investment management. It operates in Europe, the Americas, Africa and Asia.
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