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Barclays is poised to make hundreds of job cuts within its investment banking division as part of a broader cost-cutting and profit-boosting initiative, according to Bloomberg, citing insider sources.
The layoffs, affecting hundreds of roles in global markets, research and investment banking, are expected to occur in the coming months and will be part of the bank’s annual process of culling low performers, the sources said.
The move comes as Barclays plans to cut £2bn in costs over the next two years, prioritising investment in more profitable areas of its business, including its UK-focused consumer offerings and US credit card arm.
According to Bloomberg, questions persist regarding the sustainability of Barclays’s Wall Street operations. This is due to its high capital consumption relative to other higher-performing divisions.
In response, CEO CS Venkatakrishnan has outlined plans for the investment bank to pivot towards more lucrative areas, such as advisory and equity underwriting. This includes a focus on industries with growth potential, such as financial sponsors and energy companies transitioning to greener practices.
The news of more cuts follows the layoff last year of more than 5000 Barclays staff across its global operations.
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Nationwide Building Society, the UK’s largest mutual financial institution, has confirmed the details of its £2.9bn agreement to purchase Virgin Money, the country’s sixth largest retail bank.
According to the terms outlined today, Nationwide will pay 218p in cash per share of Virgin Money, along with a final dividend of 2p. With 18,000 employees, the merged entity will combine assets totalling around £366bn, making it the second-largest provider of mortgages and savings in the UK.
While Nationwide has drawn criticism for not allowing its members to vote on the deal, approval from Virgin Money shareholders is still necessary. British billionaire Sir Richard Branson, Virgin Money’s largest investor, has expressed his support for the acquisition, which stands to gain him a £700mn windfall.
Nationwide also confirmed that its chief financial officer, Chris Rhodes, will become the CEO of Virgin Money after the acquisition completes and current Virgin Money CEO David Duffy retires. It intends to eventually phase out the Virgin Money brand, after an integration period of six years.
However, some voices in the industry have already urged caution with regards to the deal.
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Citi has agreed to disclose information on its green energy financing ratios after pressure from New York City Comptroller Brad Lander and New York pension funds. Citi’s agreement follows JPMorgan’s recent announcement that it would also disclose its energy financing ratio.
As a result of this commitment, Lander has withdrawn a shareholder resolution at Citi, although similar resolutions are still moving forward at other major banks including Royal Bank of Canada, Morgan Stanley, Goldman Sachs and Bank of America.
Bloomberg New Energy Finance reports that Citi currently maintains one of the worst clean to dirty energy financing ratios globally, standing at 0.58:1. For every $1 of its financing of fossil fuels only 58 cents goes to low-carbon energy. The International Energy Agency has stated that banks’ ratios must reach 4:1 by 2030 to limit global warming to 1.5C. Citi has been contacted for comment.
Despite the move, Citi faces ongoing criticism from environmental groups for backsliding on its climate commitments. Citi, along with Bank of America, Wells Fargo and JPMorgan, recently withdrew from the Equator Principles, one of the longest-standing environmental and social market-based frameworks.
According to data from environmental advocacy group Sunrise Project, the four largest US banks remain significant funders of dirty energy industries, collectively injecting $1.4tn into these industries between 2016 and 2022.
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Raiffeisen Bank International has abandoned plans to sell risky bank debt amid concerns stemming from reported pressure by the US government regarding a deal with Russian oligarch Oleg Deripaska.
The Vienna-based bank intended to sell €650mn in “additional tier 1 bonds”, but withdrew the offering due to what it cites as an “adverse market reaction” linked to press reports about US pressure aiming to break up the deal first reported by Reuters. The deal in question involved a complex €1.5bn asset swap with Deripaska, aimed at allowing the bank to repatriate its earnings from Russia.
RBI, the largest European lender doing business in Russia, has faced increased scrutiny over its operations in the country. In 2023, almost half of its €2.5bn profits came from its Russian division, but the Kremlin’s capital controls means that RBI has been unable to repatriate its earnings.
