Barclays to Move 4,000 Investment-Bank Jobs to Cut Costs

Barclays Plc, Britain’s third-largest lender by market value, said it will shift 4,000 more administrative jobs to lower-cost locations to reduce expenses.

The lender plans to save as much as 250 million pounds ($381 million) by moving the positions, which are mostly in information technology and operations, Eric Bommensath, co-chief executive officer of corporate and investment banking, said in a presentation to investors today. He didn’t give details of which countries the posts will move to, and a spokesman for the London-based lender declined to comment further.

“We will have a greater outsourced and offshore presence,” said Bommensath, who became co-head of the division with Tom King, 52, in May after Rich Ricci stepped down. “Fewer people in high-cost locations will also help us to rationalize excess office capacity, bringing further savings.”

Barclays joins Deutsche Bank AG and Bank of America Corp. in moving employees to locations at home or overseas where wages and real estate prices are lower as they try to revive profitability. The investment-banking division will seek a return on equity, a measure of profitability, of 14 percent by 2015, excluding assets it plans to exit, Bommensath said.

Bank of America is opening a unit in India, while Deutsche Bank, Germany’s largest lender, plans to add 300 jobs to its business in Florida over the next three years.

Lending Threat

Barclays employed 139,200 people in 2012, 24,000 of whom were employed in the investment bank, according to its annual report. The lender will eliminate 3,700 jobs this year, bringing the number cut since 2008 to almost 21,000. Jenkins has told investors Barclays may trim its workforce by almost a third over the next decade as automation and online banking develop.

Jenkins said today the bank may cut lending if the Prudential Regulation Authority forces the lender to speed up plans to increase its leverage to 3 percent by 2015. The PRA last week ordered Barclays to increase the ratio, a measure of its proportion of debt to equity funding, to at least 3 percent from about 2.5 percent. The lender has to agree its plan with the regulator by the end of July.

“An aggressive acceleration request from the PRA would require additional actions which could restrict our ability to extend balance sheet availability to customers including potentially lending to the U.K. and other economies which is something we want to avoid,” Jenkins said.

The bank will reach agreement with the PRA, the Bank of England’s new banking supervisor, in the next four weeks and tell investors more when their plan has been decided, he said today. He added that the bank is “well capitalized.”

The Bank of England said in a statement in response that it had been “very clear” that any plans that restrict lending to the economy “will not be accepted.”

Before it's here, it's on the Bloomberg Terminal.