BARCLAYS escaped the sell-off in European banking stocks yesterday as it promised 3,000 job cuts this year and posted results showing that its investment bank has fared better than expected.
The bank said it had identified £2bn in cost-savings rather than £1bn, saying that it had already laid off 1,400 workers so far in 2011, with a “likely similar trend” in the rest of the year.
Chief executive Bob Diamond conceded that some of those cuts will come in the UK, with UK chief Anthony Jenkins adding: “The environment is tough in the UK. We’ve got to shape our business in response to the market.”
The bank would not give any details as to where the axe will fall but most expect Barclays Capital to be worst hit due to slow trading volumes and a strong bout of hiring last year.
BarCap’s first-half pre-tax profits fell by less than expected, but were still down 30 per cent to £2.4bn. Its fixed income, currencies and commodities division saw revenues drop by a fifth to £3.9bn.
Overall, the bank’s first-half pre-tax profit was down by a third to £2.64bn due to a £1bn hit from compensating those mis-sold payment protection insurance (PPI).
But impairments dropped sharply, down 41 per cent to £1.8bn. And Diamond was keen to point to its underlying pre-tax, excluding one-off hits to the bottom line, which jumped by 24 per cent to £3.7bn.