Barclays refused to rule out job cuts as a sharp fall in profits sent shares tumbling.
In an update that sent the stock down as much as 10pc, chief executive CS Venkatakrishnan – known as Venkat – said the bank was looking for ‘efficiencies’ as it seeks to reduce ‘structural costs’.
‘We always modulate the size of our workforce everywhere in the world in which we are and that’s what we will continue to do,’ he added when asked about jobs.
The comments fuelled fears of further cuts following the loss of hundreds of staff already this year.
The warning came as Barclays reported a 16pc slump in third quarter profits to £1.3bn as it was hit by a slowdown at its investment banking arm and shrinking margins at its UK high street division.
Barclays refused to rule out job cuts as a sharp fall in profits sent shares tumbling
Having fallen as much as 10pc, the stock closed down 6.5pc, or 9.4p, to 134.64p. Rivals Natwest and Lloyds fell 3.5pc and 2pc respectively.
Richard Hunter at Interactive Investor said the Barclays update was received ‘extremely poorly’ by shareholders. It was the first of the major UK banks to publish its third quarter results with Lloyds and Natwest also set to report this week. Like other lenders, Barclays’ income has been boosted by high interest rates pushing up mortgage costs.
But banks have come under pressure to offer competitive savings rates, with customers shopping around for higher returns.
Customer deposits in Barclays bank accounts fell 6pc to £243.2bn as Britons sought higher savings rates. Barclays said it now expects its net interest margin – the difference between what lenders charge borrowers and pay savers and a key measure of profitability – in the UK to be between 3.05pc and 3.1pc. It previously was targeting 3.2pc.
Danni Hewson, head of financial analysis at AJ Bell, said: ‘It’s never a particularly palatable message for shareholders to hear a business is going to be less profitable. While the banks were seen as beneficiaries of higher interest rates, and perhaps were for a time, the competitive and regulatory pressures to match increases in the cost of borrowing with rates offered for cash on deposits mean this benefit has not proved long lasting.’
Matt Britzman, equity analyst at Hargreaves Lansdown, said: ‘Consumers are no longer happy to park their cash in low-rate current accounts and are going shopping for higher yields.’ Barclays also said UK credit impairment charges increased to £267m in the nine months ending September 30, up from £129m last year, as customers struggled with debts.
Overall, it has set aside £433m to cover expected loan losses across the business in the third quarter. Meanwhile, income from its investment banking arm dropped 6pc year on year as volatility in the financial markets led to lower customer activity.
Venkat said: ‘We are trying to make, create, and run a more efficient organisation.’
He refused to comment about his predecessor Jes Staley, who was this month fined £1.8m and banned from working in finance after misleading regulators about his friendship with paedophile Jeffrey Epstein.
‘S’ in ESG should stand for security, says Citi boss
THE most powerful woman in banking has said ‘security’ should be included in woke ESG investing given escalating tensions around the world.
Jane Fraser, the British boss of Wall Street giant Citigroup, said the attack on Israel by Hamas has prompted global business leaders to place more weight on security issues.
Jane Fraser (pictured), the British boss of Wall Street giant Citigroup, said the attack on Israel by Hamas has prompted global business leaders to place more weight on security issues
So-called ESG investing focuses on environmental, social and governance issues.
It has come under fire for being ‘woke’ and avoiding sec- tors crucial to democracy and freedom, such as defence.
Fraser, a mother of two dubbed ‘the First Lady of Wall Street’ having become the only woman to head one of America’s leading investment banks, did not criticise ESG itself, but said there should be a greater focus on security.
‘There is a new S in ESG which is security, be it food security, energy security, it could be defence or financial security,’ the 56-yearold said.
‘We’re sitting here with a backdrop of the terrorist attack in Israel and the events that have unfolded since, and it’s desperately sad. It’s hard not.
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