) 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
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
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
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
) 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,
) announced its decision to sell the private wealth management
unit in India to
Standard Chartered PLC
) by the end of this year.
Currently, Barclays has a Zacks Rank #3 (Hold).
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