Barclays staff fear job losses as bank seeks to reward shareholders amid falling profits
Barclays CEO, CS Venkatakrishnan, said the bank will continue to “modulate” the size of its workforce around the world.
Barclays has said it’s focused on enhancing ‘returns for shareholders’ as falling profits prompt the bank to cut costs throughout the company. Shares in the banking giant tumbled by more than 8% on Tuesday morning after its third quarter profits were down 4% compared to last year.
Group chief executive CS Venkatakrishnan, known within the group as ‘Venkat’, said the lender will be cutting costs in order to boost rewards for shareholders. When asked about whether these cost-cutting methods will affect jobs, Venkat said the bank will continue to “modulate the size of our workforce” around the world.
Barclays reported a pre-tax profit of £1.9 billion for the three months to September, slightly ahead of analysts’ expectations but below last year’s £2 billion profit. The bank said it will provide an update to investors within its full-year financial results announced next year.
The bank also announced - due to higher interest rates and weaker house prices - it will increase its credit impairment charges, despite the proportion of people falling behind on loan repayments remaining low. The company confirmed it has set aside more than £430 million as the spike in Mortgage rates increased the number of defaults.
The Bank of England‘s Credit Conditions Survey, published in July, found mortgage defaults leapt to 30.9 on its index, up from 14 in the first quarter of 2023. The figure is the highest number recorded since 2009, less than a year after the financial crisis.
Barclays’ reported in its full-year financial report for 2022, that it had put aside £1.2bn to cover a potential increase in defaults by customers. Until the annual report for 2023 is published next year, it isn’t clear how much in total has been put into the companies cash cushion this year.
As well credit impairment charges, there will be eyes on bonuses paid out to executives in the upcoming report. According to documents released alongside the financial report for 2022, CEO Venkat received a total of £5.2m including a £2m bonus.
Additionally, the annual report also disclosed that former CEO Jes Staley - who has been banned from working in UK financial services after misleading regulators over his relationship with late sex offender, Jeffrey Epstein - was paid £2.3 million in fixed pay and other allowances in 2022.
Earlier this month, the bank announced it would cancel at least £17.8m in bonuses and deferred pay awards that Staley was due to receive. The bank hasn’t announced whether the deferred bonuses will be reallocated.