Is Barclays just the start of big culls ?
Barclays’ decision to shrink its investment bank shows how tighter rules and dwindling revenue are forcing Europe’s banks to scale back operations and efforts to compete globally.
Bloomberg News reports that in a break from his predecessor’s strategy to create a global securities operation, Barclays Chief Executive Officer Antony Jenkins said Thursday the firm will eliminate 7,000 jobs, a quarter of employees at the investment bank, shrink its fixed-income business and focus on fewer clients in the U.K. and U.S.
The fixed-income market faces a structural rather than a cyclical decline and investment-banking revenue will be 'weak for some time', Jenkins told reporters.
'European banks haven’t had sufficient time to build capital, and investors and managers have become impatient', said Paul Vrouwes, who helps oversee about $8.3bn at ING Investment Management in The Hague, including Barclays shares. 'Banks are having to think about returns at the group level, and they are seeing a more promising environment in other areas'.
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