More Barclays jobs to go despite profits lift

Barclays is eager to accelerate the pace of change says John McFarlane
Barclays is eager to accelerate the pace of change says John McFarlane

Barclays boss John McFarlane has signalled more job cuts to come at the bank as he set out plans to ramp up earnings growth and squeeze costs after half-year profits jumped by 25 per cent but returns for shareholders remained low.

The executive chairman would not confirm reports that 30,000 jobs at the bank are to go but admitted that its new strategy of slimming down its international presence and streamlining executive decision-making would take its toll on numbers.

However, Mr McFarlane, who has taken temporary charge after chief executive Antony Jenkins was fired, signalled that he wanted to slow the pace of branch closures after their number fell by 98 over the last year.

Early indications were that a replacement for Mr Jenkins looked likely to be appointed from overseas.

Interim results showed pre-tax profits climbed to £3.11 billion in the first six months of the year but the dividend for this year will be flat at 6.5p, well below its level before the financial crisis.

The profit rise comes despite a £1 billion hit during the period to fund compensation schemes over past mis-selling scandals involving products such as payment protection insurance (PPI) including £850m in the second quarter.

Mr McFarlane acknowledged that the lender needed to “accelerate growth in earnings” and slash its ratio of costs to income as he admitted the dividend to shareholders needed to be several times higher.

Disappointing returns for investors had been one of the reasons cited when Barclays dispensed with Mr Jenkins three weeks ago.

The bank wants to accelerate the pace of change and Mr McFarlane said it would “act quickly to curtail activity which is marginal or which will not deliver the return on equity we require”.

Barclays is already undergoing a major cost-cutting programme which saw 14,000 posts slashed last year and is expected to see 5,000 more axed by 2016.

Since Mr Jenkins’s departure there has been speculation that the group plans to shrink its workforce further, taking it from 132,000 to below 100,000 by the end of 2017.

Mr McFarlane said: “We’ve actually not made that decision and we have not confirmed any such number.

“It is fair to say that with the actions we will take, the company will get smaller in terms of headcount but we are not going to speculate on what that is and actually at this point in time we don’t know what that is.”