Barclays Continues to Streamline - Analyst Blog
27 Settembre 2013 - 4:00PM
Zacks
Barclays plc (BCS) recently announced that it
will discontinue its wealth management services in 130 countries by
2016, as part of the company’s new strategy. However, the company
will concentrate on the remaining wealth management units in 70
markets, which constitute 86% of the global wealth market.
There are about 8000 employees who come under the purview of the
planned strategy. The spokesperson for Barclays confirmed that
though drastic job cuts are unlikely, there might be some change in
the number of employees due to reshuffling.
The latest move by the company is likely to affect thousands of
customers with investment capacity of 100,000–500,000 pounds
($160,000-$801,260). Therefore, Barclays formed a new segment
called “Private Clients” to cater to their needs.
In the first half of 2013, Barclay’s Wealth and Investment
Management division reported adjusted profit before tax of £47
million ($73 million), decreasing 53% from the prior-year period.
The figure was disappointing and lagged that of the company’s
peers.
Barclays has been going through a rigorous phase of restructuring
in an attempt to streamline its business. Going by the new
strategy, the company now intends to focus primarily on its areas
of comparative advantage and dispose the loss-making underscale
units worldwide.
Antony Jenkins who took over as Barclays’ Chief Executive Officer
(CEO) in August this year has clearly declared his motive of
aggressive cost reduction. He targets to slash 3,700 jobs globally,
restrain senior bankers’ remuneration and close unproductive
business units across the globe to save $2.6 billion annually.
In the present economic scenario, financial institutions are
finding it difficult to deal with rising expenses and the limited
scope for increasing income. Hence, most of these institutions are
resorting to cost reduction measures such as layoffs and downsizing
troubled units/branches.
On Tuesday, a Swiss newspaper reported that Credit Suisse
Group AG (CS) will cease to offer wealth management
services in 50 countries by the end of 2013, thereby saving 4.4
billion Swiss francs ($4.8 billion). Moreover, in May 2013,
Morgan Stanley (MS) announced its decision to sell
the private wealth management unit in India to Standard
Chartered PLC (SCBFF) by the end of this year.
Currently, Barclays has a Zacks Rank #3 (Hold).
BARCLAY PLC-ADR (BCS): Free Stock Analysis Report
CREDIT SUISSE (CS): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
STANDARD CHARTR (SCBFF): Get Free Report
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