Barclays Plc, the U.K.’s second-largest bank by assets, is moving more employees to an office in Singapore’s central business district from the suburbs to cut costs, said people familiar with the matter.
Barclays will terminate its lease on about 15,500 square feet (1,440 square meters) of office space at a building in Tampines, an eastern suburb, and relocate the employees to Marina Bay Financial Centre by July, said one of the people, who asked not to be named because the information is private. About 300 people who work in back-office roles will be affected, the person said. Barclays declined to comment in an e-mailed response.
It follows a similar move by the bank earlier this year when it exited Changi Business Park, another suburban office in the island-state, and relocated about 200 employees to the downtown office. Antony Jenkins, who replaced Robert Diamond as the London-based bank’s chief executive officer in 2012, is eliminating 12,000 jobs to curb costs and boost profitability.
“If you don’t have the size or scale, it’s better to be operating from one building,” said Donald Han, managing director of Chesterton Singapore Pte, a real estate consultancy. “The decision could be one of scale, one of efficiency and of being able to consolidate under one roof despite current rentals being higher at MBFC.”
Monthly rents at Marina Bay Financial Centre are now S$11 to S$12 a square foot, compared with around S$10 to S$11 per square foot when Barclays moved into the building in 2011, said Han. The bank may have gotten a “big discount,” considering the size of the space it leased, he said. That compares with as much as S$8 to S$9 per square foot monthly rent, including disaster recovery and data centers, at the building in Tampines, from which Barclays is vacating, he said.
Once the move from Tampines is completed, Barclays, which runs businesses including corporate banking and wealth management, will have a total of two offices in the island-state, including One Raffles Quay, also in the Marina Bay area.
It occupies about 290,000 square feet at Marina Bay Financial Centre, part of the 360-hectare (890-acre) Marina Bay development that Singapore started building in 2005 on reclaimed land located in the southern part of the country. It has another 96,000 square feet at One Raffles Quay, according to Barclays.
Barclays had 4,700 staff in Singapore, according to data provided by the bank in September 2012. In October 2013, it employed 3,500 full-time employees, according to a press release marking 40 years in Singapore.
Return on average equity at Barclays’s securities unit, a measure of profitability, fell to 8.2 percent last year from 13 percent in 2012, compared with Jenkins’s target of at least 11 percent in 2015. Compensation as a proportion of investment-banking revenue rose to 43.2 percent in 2013 from about 40 percent the previous year. That compares with the 35 percent target Jenkins set for 2015.