- Disclosure indicates fourth-quarter income at unit to fall 11%
- News comes as CEO unveils latest round of cost cuts, closures
Barclays Plc said it expects income at the investment bank to be “broadly flat” in 2015 from the previous year, as Chief Executive Officer Jes Staley announced a series of measures to boost the unit’s profitability.
Barclays is “accelerating the investment bank strategy outlined in 2014, focusing on its core strengths and running the business for returns,” Staley said in a statement on Thursday. The unit, led by Tom King, reported revenue of 7.6 billion pounds ($10.7 billion) for 2014, down from 8.6 billion pounds a year earlier.
European investment banks have struggled to shore up earnings battered by falling revenues, tougher capital requirements and rising compliance and legal charges. At Barclays, Staley on Thursday announced the closure of offices in nine countries as he seeks to focus on the most profitable businesses in the U.K. and the U.S.
“We continue to build on the business’s dual home markets in the U.K. and U.S. and remain committed to a strong presence in Asia and EMEA, consistent with operating a leading global investment bank within the Barclays Group,” Staley said.
In the nine months ended Sept. 30, the securities unit had income of 6.11 billion pounds, implying revenue in the fourth quarter will be about 1.48 billion pounds. That would be a 11 percent decline from 1.67 billion pounds a year earlier.
Deutsche Bank AG said late Wednesday that “challenging market conditions” hurt earnings at the investment bank in the fourth quarter. The German bank expects to post a 2.1 billion-euro ($2.3 billion) loss for that period after setting aside more money for legal matters and taking a restructuring charge.
Barclays reports full-year earnings on March 1. The shares rose 2 percent to 185.75 pence at 3:13 p.m. in London. They have dropped about 15 percent this year.