Barclays aims to cut costs by £1.7 billion by 2015. Ben Stansall / AFP
Barclays aims to cut costs by £1.7 billion by 2015. Ben Stansall / AFP

Barclays axes 12,000 jobs worldwide but bumper bonuses for executives



Barclays said it would cut 12,000 jobs worldwide yesterday even as it disclosed a bumper bonus pot of £2.4 billion (Dh14.5bn) for its staff – up 10 per cent from last year.

The British bank, which received capital injections from Abu Dhabi and Qatar at the height of financial crisis to avoid being nationalised by the United Kingdom’s government, aims to cut costs by £1.7bn by 2015.

Barclays last year disclosed its intention to sell its retail operations in the UAE, but intends to retain its corporate banking services, with investment and private banking arms located in the Dubai International Financial Centre, and a further private banking branch in Abu Dhabi.

The company has 600 employees in the UAE, but their jobs would not be affected by the cuts, Barclays said.

The bank’s fourth-quarter adjusted pre-tax profits fell to £194 million in the fourth quarter of 2013, compared to adjusted pre-tax profits of £1.09bn in the same quarter a year earlier. This figure was affected by a one-off charge of £330m to settle lawsuits and regulatory penalties.

Mounting fines and regulatory set-asides have eaten into Barclays’ margins, as the impact of mis-selling of payment protection insurance, and settlements over the fixing of the London Interbank Offered Rate (Libor), the interest rate at which London-based banks loan funds to one another, are felt on the company’s balance sheet.

“It’s a grossly inappropriate time to increase variable compensation [bonuses] by £200m,” said Ian Gordon, the head of banks research at Investec, an asset management group. “The rise appears to be taken in isolation from the underlying business performance.”

Mr Gordon said that for Barclays to reach its £1.7bn cost-cutting target, much of the heavy lifting would have to be done by the investment bank. But the size of Barclays’ bonus payouts suggest that management’s “willingness and capability” to make cuts to the bank’s investment arm may be lacking.

“It’s revenue flat and costs up, without an adequate explanation for why, or a forward-looking explanation as to what transforms that story going forward,” said Mr Gordon.

“Our industry is going through what I regard as a 100-year transformation,” said the chief executive Antony Jenkins.

Barclays is also under investigation by Britain’s Financial Conduct Authority for alleged fixing of the eurodollar market, the Financial Times reported last November. Barclays’ share price dropped by 4.85 per cent during mid-afternoon trading in London yesterday.

* With Bloomberg News

England Test squad

Joe Root (captain), Moeen Ali, James Anderson, Jonny Bairstow (wicketkeeper), Stuart Broad, Jos Buttler, Alastair Cook, Sam Curran, Keaton Jennings, Dawid Malan, Jamie Porter, Adil Rashid, Ben Stokes.

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Dubai World Cup factbox

Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)

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Most wins by an owner: Godolphin(9)

Most wins by a horse: Godolphin’s Thunder Snow(2)

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UAE athletes heading to Paris 2024

Equestrian
Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).
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Cycling
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Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics
Maryam Mohammed Al Farsi (women's 100 metres).

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Name: Elggo
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2002 Giselle Khoury (Colombia)

2004 Nathalie Nasralla (France)

2005 Catherine Abboud (Oceania)

2007 Grace Bijjani  (Mexico)

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How to keep control of your emotions

If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.

Greed

Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.

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Fear

The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.

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Hope

While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.

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Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.

Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.

Boredom

Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.

Tip: Open an online demo account and get your thrills without risking real money.

MATCH INFO

Argentina 47 (Tries: Sanchez, Tuculet (2), Mallia (2), De La Fuente, Bertranou; Cons: Sanchez 5, Urdapilleta)

United States 17 (Tries: Scully (2), Lasike; Cons: MacGinty)


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