Barclays Restructuring Thoughts?
What are everyone's thoughts on Barclays announcement today? Shares have been up ~5% this morning from the announcement.
In summary, core announcements are below:
- Posted its first quarterly loss since 2019
- Bonus pool slightly shrunk in 2023
- Will return £10 billion to shareholders through buybacks and dividends through 2026
- Plans to cut costs by another £2 billion through "efficiency savings" from 2024 - 2026. Cuts will be focused in the IB division in general.
- Operational restructuring now creates 5 business lines, with more of a focus on the UK performance.
The announcement seems more akin to that of DB than Citi's restructuring. What impacts do you expect this to have on the Banking and Markets units in the US? Do you expect to see little changes or more drastic measures, such as deep headcount reduction or eliminating whole teams (i.e. Citi closing the Muni and distressed debt desks)?
Ultimately they will seek to shrink their US IBD presence. Not sure how viable of a strategy it is to keep those operations on, given their market standing
Different from DB. DB has solid non-IB divisions and is now investing to grow its IB arm to catch up with Barclays & UBS.
Barclays is the opposite. It aims to keep the size of its IB, which is relatively strong, as it is while investing in other parts of the bank.
Don't know if I would agree with this fully. As much as the IB is the crown jewel of Barclays it has also been the laggard in recent years. The announcements today read that they are aiming to maintain their standing in IB with a smaller headcount and with other cost efficiencies. I do agree that DB has stronger non-IB offshoots than Barclays.
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