Home Business NewsBusinessBanking News Barclays to cost cut by £2 billion in a overhaul as profits plummet

Barclays to cost cut by £2 billion in a overhaul as profits plummet

by Amy Johnson LLB Finance Reporter
20th Feb 24 11:18 am

Barclays has revealed that their profits have fallen and are planning to strip out a further £2 billion in costs by 2026.

On Tuesday morning shares climbed 5% after the announcement of structural shake up to simplify the business to return even more money for their investors.

Barclays said the cuts are to reduce their cost to income ratio, so the amount they spend on running the company as a percentage of the amount the bank generates in income.

This is on top the £1 billion already spent last year on the restructuring costs on branches, offices and staff.

The bank spent £300 million on “rightsizing” their headcount and they had previously cut around 5,000 full time jobs across the business in 2023, although Barclays did not specify how many jobs are expected to be lost.

In the last three months of 2023 profits plummeted by 92% to £110 million from £1.3 billion.

Barclays chief executive, CS Venkatakrishnan, said, “Our new three-year plan, which we will be announcing at the investor update today, is designed to further improve Barclays’ operational and financial performance, driving higher returns, and predictable, attractive shareholder distributions.”

Kathleen Brooks, a research director at XTB, said Barclays’ plans is setting “a high bar,” which involves “building a greater institution than what Barclays is today,” she then warned that his means there will be job cuts.

Brooks added, “Barclays strategic review was punchy, and it essentially boils down to two things: cut costs aggressively and boost profits and continue to return capital to shareholders, to the tune of £10 billion by 2026.

“This is exactly the type of message that shareholders love at the moment, and it is why the market has reacted with glee on Tuesday morning.”

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