'(The bank) must either lay out a commitment to a full service, independent investment bank or choose to downsize it more dramatically'.
Barclays will struggle to meet its profitability target unless it makes deeper cuts to its investment bank, analysts at Berenberg Bank said.
Bloomberg News reports that CEO Antony Jenkins has targeted a 12% return on equity by 2016. While the investment bank, headed by Tom King, increased profitability in the first quarter, cost cuts were responsible for the bulk of the improvement as trading income stalled.
'The malaise from the lackluster investment bank strategy has worsened', said James Chappell, an analyst at Berenberg in London, who downgraded the stock to sell on Friday. 'Barclays must either lay out a commitment to a full service, independent investment bank or choose to downsize it more dramatically'.
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