Barclays has announced a strategy to reduce costs by £2 billion across its operations over the next two years, aiming to enhance profitability.
The bank’s Chief Executive, CS Venkatakrishnan, commonly referred to as Venkat plans to reorganize the bank into five distinct divisions and has committed to returning £10 billion to its shareholders through buybacks and dividends by 2026.
Venkat is set to provide further details on the restructuring plan today, which may include potential job reductions. He stated, “Our new three-year plan, to be revealed at today’s investor update, is focused on boosting Barclays’ operational and financial efficiency, leading to higher returns and consistent, appealing distributions to shareholders.”
In 2023, Barclays faced a £927 million expense related to this restructuring, contributing to a 12% decrease in pre-tax profits to £6.6 billion, slightly below expectations and less than the £7 billion reported the previous year. This decline was partly due to a significant restructuring charge in the last quarter of 2023.
The bank’s income rose marginally to £25.4 billion from £25 billion in 2022. Additionally, Venkat has raised the target for return on tangible equity from 10% to 12% by 2026, marking the first increase in seven years.
Under Venkat’s leadership, who took over more than two years ago, Barclays’ shares have dropped by 27%. This overhaul, the first since 2014, follows Antony Jenkins’ efforts to scale back the investment bank after he succeeded former investment bank head Bob Diamond. Jenkins was later succeeded by former JP Morgan banker Jes Staley.
Venkat assumed his role in November 2021 following Jes Staley’s resignation amid allegations concerning his ties to Jeffrey Epstein, a convicted sex offender. The FCA found that Staley had been untruthful about his relationship with Epstein, a decision he is currently appealing.
