Feb. 11 - British bank Barclays is planning to cut up to 12,000 jobs this year in order to cut costs and offset falling income at its investment bank, where profits slumped in 2013. But as Joanna Partridge reports, it is also risking a backlash from the public and politicians for paying higher bonuses.
Many thought banks were on the mend, and the time of big job cuts was over. Not so at British lender Barclays. It's expecting to axe 12,000 jobs this year. 7,000 will go in the UK, spread across different parts of the business. It's part of the latest drive to cut costs due to falling income at its investment bank. Profits slumped in 2013 at both the bank and its investment arm. But Barclays is also paying staff bigger bonuses- still a touchy subject with politicians and taxpayers - and which could cause a backlash. Angus Campbell is from Fx Pro. SOUNDBITE: Angus Campbell, Fx Pro, saying (English): "It hasn't been bailed out by the UK government so it's not taxpayer-owned, it can pay bonuses more freely, but it certainly doesn't make particularly good news." Barclays 2013 results showed its earnings fell by 32% from the previous year, dropping to 5.2 billion pounds. That was below analysts' forecasts. Profits at the investment bank also slumped 37%. Despite the numbers, Saxo Bank's Nick Beecroft believes Barclays - and its peers - are moving in the right direction following the financial crisis. SOUNDBITE: Nick Beecroft, Saxo Bank, saying (English): "Anthony Jenkins of Barclays put it very well when he said that this is a once in a hundred year transformation that the banking industry needs to go through. I think it is true that it needs to go through that but it ain't going to happen overnight. Let's set a five-year target on having achieved a considerable and measurable transformation." Jenkins, Barclays' CEO, has been transforming the bank since he took charge in 2012. He's pulling Barclays out of some investment banking activities as he tries to clean up standards and improve returns for investors. The lender is also working hard to convince customers it's drawn a line under the scandals of the past. That's a challenge faced by the whole banking industry, says David Buik from Panmure Gordon. SOUNDBITE: David Buik, Market Commentator, Panmure Gordon, saying (English): "With all these misdemeanours, with PPI, with Libor, with money laundering, and all these other issues, until somebody senior goes to jail for these misdemeanours, they are never going to stop." Barclays shares fell by as much as 7% on Tuesday before recovering slightly. A sign that the bank still has a way to go to make itself more attractive to investors and customers.