Barclays just unveiled a shake-up at its investment bank.
Tom King, CEO of the investment bank, said in a memo sent Thursday that the bank would close the Moscow office, shutter stock trading in Asia, and make changes to the US markets business.
Business Insider has managed to get hold of the memo and is running it in full below.
The memo makes reference to job cuts, but doesn’t set out how many people will be affected. Bloomberg has reported that 1,000 jobs in the investment bank will be cut.
The changes are the first since former JPMorgan executive Jes Staley took over as chief executive.
The job cuts at Barclays extend a tough run for Europe’s banks. Deutsche Bank on Wednesday said it would report a full year net loss of 6.7 billion euros ($7.3 billion). Credit Suisse has also announced cuts to some trading businesses.
Here is the memo:
Message from Tom: Continuing our evolution as a bulge-bracket investment bank
We are today announcing changes that evolve and refine our business; strengthening our position as a bulge-bracket investment bank.
Since we announced our strategy in May 2014 we have accomplished a lot. Our returns have improved and we are ahead of many of our peers in re-shaping our franchise. But there is more to do before we deliver the potential of our business.
Today’s changes are further progress in implementing our strategy. We regret that some colleagues will leave the organisation as a result, and I would like to thank them for their commitment to Barclays and wish them the very best for the future.
By focusing our business on areas where we have sustainable competitive advantage, we are putting ourselves in a position where we can not just survive but thrive in a dynamic, complex operating environment.
Our business in Asia Pacific
- Asia Pacific is an important part of our global network.
- We are sharpening our focus on the geographies and products where we have a clear competitive advantage, with a physical presence only in China, Hong Kong, India, Japan and Singapore.
- We will continue to provide expertise and resources to global and local clients in the region who have cross-border requirements, with a particular focus on connections to the US and EMEA.
- In Markets, we remain committed to our strong EFS and Equity Finance franchises in Asia Pacific, and to our mature Macro and Credit businesses in the countries where we maintain a physical presence. We will discontinue Asia Pacific local cash equity products, with the exception of electronic execution-only services. We will no longer pursue high-touch Equities sales, trading, or research coverage of Asia product in any region.
- In Banking, we will maintain a full client offering in Debt Financing, Risk Management and cross-border M&A. We will focus our Equity Capital Markets offering on equity-linked financing, derivatives, and taking our local clients to the international capital markets, particularly the UK and the US.
- Asia Pacific remains the key global infrastructure hub for Barclays.
Our business in EMEA
- We are the only bulge-bracket investment bank headquartered in the UK, and that makes us uniquely placed to support UK and EMEA clients in decreasing their reliance on bank balance sheets, by strengthening the capital markets to support economic growth.
- Our 325-year history and our broad and deep client relationships in our UK home market are a key competitive advantage for us.
- Our leading EMEA franchise will continue to deliver a full spectrum of investment banking products and services to our clients across the region, with supporting infrastructure and execution capabilities anchored in our UK hub.
- We will continue to anchor our Banking CEEMENA coverage teams in London and Dubai. We will discontinue sales and research coverage of CEEMENA cash equity products and centralise execution in London.
- We will cover key Russian corporate and financial institutions through dedicated London-based coverage teams, closing our Moscow office
- We are evaluating various options for the exit of our Precious Metals business, and in the process will seek to minimise disruption to clients, colleagues and the market.
- Our proposition in EMEA is otherwise unchanged.
Our business in the Americas
- As one of our two home market franchises, in the world’s largest single pool of capital, our leading US business is another distinct competitive advantage for Barclays.
- We will continue to invest and evolve our offering, building on the strength of our client relationships.
- An immediate step in that evolution will be to focus our securitized products capability in origination-led Asset Backed and Commercial Mortgage Backed Securities. Our Agency pass-through business will be incorporated into our Macro business. As a result, we will no longer offer Residential Loan Trading, GNMA CMBS or CMO products.
- In Brazil, Markets capabilities will be delivered offshore by our New York and London teams, with a continued Banking focus on Brazilian clients.
- Our proposition in the Americas is otherwise unchanged.
Continuing our evolution
We are, and will remain, one of the small number of firms globally that provide the critical link between providers and users of capital, and enable them to manage risk and grow. We are proud to be a bulge-bracket investment bank.
Our business combines scale and strong relationships in the world’s two most significant pools of capital – the UK and the US – with a powerful distribution network globally and world-class expertise and execution in risk management.
We have shown discipline in our own use of capital; supporting our clients and growth of the capital markets in a way that will enable a sustainably attractive return for our shareholders.
Your passion for our clients and commitment to our business has enabled us to make great progress on our strategy. We have moved quicker and evolved further than many of our peers and the changes we are announcing today continue that evolution.
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