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Barclays to cut 3,700 jobs

Cost cutting.

The British investment bank Barclays is planning to cut at least 3,700 jobs in 2013 as part of its strategic plan to reduce its cost base by £1.7bn in 2015.

As part of restructuring, the bank is expected to reduce 1,800 positions from its corporate and investment banking arm as well as 1,900 retail and business banking posts in continental Europe.

Antony Jenkins, new chief executive of Barclays, said: “There is no doubt that 2012 was a difficult year for Barclays and the entire banking sector.

“The behaviours which made headlines during the year stemmed from a period of 20 years in banking in which the sector became too aggressive, too focused on the short-term, and too disconnected from the needs of customers and clients, and wider society.”

Barclays, which also confirmed to close its tax planning business, reported a pre-tax profit of £246m for 2012, a decrease from £5.88bn a year ago.

The significant fall in profit was mostly attributable to an artificial £4.58bn own credit accounting charge related to the fluctuating value of the bank’s issued debt in addition to £1.6bn the bank has set aside during 2012 to cover the cost of compensating customers who were mis-sold payment protection insurance.

On an adjusted basis, the mis-selling costs and other items, Barclays posted a pre-tax profit of £7.05bn, an increase from the £5.59bn achieved a year ago.

The cost of compensating small and medium-sized businesses for selling mis-sold interest rate hedging products has lopped £850m from its statutory pre-tax profit in 2012.

In June 2012, the bank was fined £290m by US and UK authorities for manipulating submissions used in calculating the Libor and Euribor benchmark interest rates.