Daily Management Review

Q1 Profit Loss Prompts Barclays To Further Slash Costs


The tough markets are given pressure on Barclays which is caught in the public spat between its C.E.O and the activist and investor.

Source: flickr.com; (CC BY 2.0)
Source: flickr.com; (CC BY 2.0)
In the Q1, Barclays experiences a drop of ten percent in profit figures, while the investment bank seems to struggle under the pressure of tough markets situation which prompts the institution to further slash costs in case the conditions persists.
The poor performance from the investment banking has an “awkward” timing as Barclays is caught amid the public battle of “chief executive Jes Staley” and “activist investor Edward Bramson”, as the latter is of the opinion that the unit needs to pare back for increasing overall returns.
As per last week, the investment bank dropped down “to 9.5 percent from 13.2 percent” and its “overall profit was 1.54 billion pounds”. However, the figure was within the “1.57 billion forecast” that was compiled from “the average estimates of 13 analysts polled by the bank”. Hargreaves Lansdown’s analyst, Nicholas Hyett said:
“Despite a better than expected result in fixed income trading, today’s numbers will do little to take the pressure from activist Edward Bramson off the board”.
Furthermore, Barclays also revealed that if the market situation doesn’t ease out, it may be forced to slash down “annual costs in 2019 below the 13.6 billion to 13.9 billion pound range it earlier said it expected”.
Barclays hinted that it keeps more at discretion for cutting bonuses in case “performance clips”, for it revealed that the measures taken by the bank “three years ago” for ensuring “bonus pools in a given year are better aligned with that year’s performance”. While, Staley added:
“What you see in the first quarter is Barclays using this discretion around variable compensation to manage our costs and deliver expected profitability”.