Barclays is considering a retrenchment from continental Europe which could include the sale of its business in France, Spain, Italy and Portugal as part of its strategic review to be unveiled this week.
Antony Jenkins, chief executive, is expected to announce that most of the bank’s retail operations in western Europe could be put up for sale as part of the cost-cutting and restructuring exercise, according to reports in The Sunday Times. The strategic review, due on Thursday, is the second in Mr Jenkins’ two-year tenure.
He hopes it will relieve some of pressure Barclays is under at the moment from shareholders and the City, as well as politicians. Tomorrow the bank is due to deliver first quarter results and has already warned that profits will be hit due to a slowdown in fixed-income trading.
This weekend, it emerged that Ros Stephenson, chairman of investment banking at Barclays, has quit to join UBS. The departure followed the resignation last week of Hugh “Skip” McGee, chief executive of Barclays Americas and one of the bank’s best known dealmakers. Separately, Robert Morrice, chairman of Barclay’s Asia-Pacific business, is retiring after 17 years.
Two weeks ago Barclays suffered a protest vote at its annual shareholder meeting over an increase in bonuses at its investment bank. Analysts said the bonuses were needed to avoid a “death spiral” of US staff quitting amid poaching attempts from rival banks.
Mr Jenkins in under shareholder pressure to cut costs, including pay deals, and come up with a long-term strategy for its investment bank. The high-profile division has struggled to generate returns above its cost of capital.
As part of the strategic review, Barclays is expected to create a “bad bank” to house non–core assets in a move designed to revive the rest of the investment bank.
The division is expected to take on large parts of the non-performing assets, including the bank’s commodities operation.
Barclays has considered selling its operations in France and Italy before but has apparently failed to find buyers. Mr Jenkins knows the bank’s continental operations well having been involved in buying its credit card operations in Portugal and Italy.
Although the divisions are not failing, Mr Jenkins is thought to have decided that their profits are too low.
Barclays declined to comment.
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