Barclays weighs client cuts

Barclays is considering a strategic overhaul to enhance profits and reduce costs by potentially dropping thousands of clients at its investment bank. The restructuring, codenamed Minerva, has been discussed in several meetings this year. CEO CS Venkatakrishnan is under pressure to decrease reliance on investment banking, with an announcement expected in February.

The company’s shares are near their lowest since the Covid-19 pandemic, prompting consideration of radical options like raising capital to acquire a wealth or asset management business or significantly reducing trading assets at the investment bank. 

However, opposition from trading co-heads Adeel Khan and Stephen Dainton is steering the strategy towards a more moderate course. A focus on cutting ties with the least profitable investment banking clients, possibly more than 2,500 out of 10,000, is being considered.

The move could free up as much as £20 billion of risk-weighted assets, benefiting shareholder returns. Barclays is also looking to cut as many as 2,000 jobs across the group for £1 billion of cost savings.