Reuters London/New York
Barclays was planning to withdraw from large parts of the metals, agricultural and energy markets as part of a restructuring of its investment bank, a person familiar with the matter said yesterday.
Barclays, one of the top five banks in the global commodities business, was expected to announce its reduced activities to staff today, the source said.
The move was expected to involve sizeable cuts to staff numbers, although the source did not specify how many people were likely to go. The Financial Times, which first reported the cutback, said there would be heavy reductions in the 160 commodities staff.
Barclays declined to comment yesterday.
The lender follows other banks, such as JPMorgan Chase and Morgan Stanley, in a retreat from commodities as tougher rules make trading them less profitable.
The rules require banks to hold far more capital than in the past against trading operations.
Barclays chief executive Antony Jenkins plans to release full details of a review of the investment banking business on May 8, which could result in the loss of thousands of jobs as he strives to cut costs and improve profitability in the business.
The news on commodities will come just two days before Barclays holds its annual shareholder meeting.
Britain’s third-biggest bank has been criticised at past annual meetings for some of its commodities activities, and investors are keen to see some signs of change.
Barclays has already cut some areas of its commodities business, including its US power market operations and soft commodities.
Jenkins has been criticised by shareholders for increasing bonuses for investment bankers last year despite a drop in profits.
He has undertaken the third internal review of the investment bank in as many years in response to pressure to cut costs and improve returns, which lag behind other parts of the business, such as Barclaycard.
Analysts expect cuts in areas such as credit trading, emerging markets, securitisation, structured credit and equity derivatives.
On Friday, Barclays announced a shake-up of its investment bank management team, including a new head of markets and new co-heads of banking.