BARCLAYS is expected to cut back its commodities trading business in reforms to be announced today, ahead of a bigger investment banking shakeup.
The reforms have been prompted by tougher regulations driving up the cost of doing business in the markets.
The changes should also please protestors ahead of this Thursday’s annual general meeting – last year critical shareholders complained that the bank trades agricultural commodities.
The wider changes to the investment bank are set to be revealed on 8 May.
“The world around us continues to change. Regulatory developments and the macro-economic environment are having a significant effect on some parts of our business which we need to address proactively and decisively,” chief executive Antony Jenkins said in a memo to staff last week.
The changes will be the result of more than a year’s work, begun last February. Jenkins called the scheme Transform, and said he is not afraid to cut back or shut down business units if they do not clearly have potential to make sustainable profits.
The whole investment banking industry is under intense pressure in key areas like fixed income – bond trading has been hit by a falling market after decades of rising prices, while regulations are squeezing margins across the board.