Barclays announces job cuts and transformation plan

Barclays said today that it is aiming to transform its business after a series of scandals rocked the bank and the wider industry.

New chief executive Antony Jenkins, who took over from Bob Diamond in August, said that Barclays is aiming to become the ‘go-to’ bank for all of its stakeholders – customers and clients, colleagues, investors and wider society.

The transformation plan comes as the bank attempts to rebuild its reputation in the wake of last year’s fine for attempting to rig the Libor interest rate, and industry-wide mis-selling scandals in the UK involving payment protection insurance and interest rate hedging products.

Barclays announced today a drop in pre-tax profit to GBP246m in 2012, from GBP5.9bn in 2011, after the bank recorded a GBP4.6bn charge against the value of its own debt and set aside GBP2.45bn for the cost of mis-selling compensation.

Reflecting on a difficult year for Barclays and the entire banking sector, Antony Jenkins said: “The behaviours which made headlines during the year stemmed from a period of 20 years in banking in which the sector became too aggressive, too focused on the short-term, and too disconnected from the needs of customers and clients, and wider society. Barclays was not immune from the impact of these trends, and we suffered reputational damage in 2012 as a consequence.”

Change is needed both at Barclays and in the industry as a whole, the chief executive added.

Following a strategic review, Barclays said today that it is aiming to reduce costs by GBP1.7bn and will be cutting 3,700 jobs across the business. The job reductions will result in a restructuring charge of close to GBP500m in the first quarter of 2013.

Primarily the job cuts will be made in the bank’s investment banking activities in Asia and its retail banking business in Europe. Very few of the job losses are expected to be in the UK.

In the future, Barclays intends to focus on activities that support customers and clients in geographic markets and businesses where the bank has scale and competitive advantage. Specifically, it will focus investment in the UK, the US and Africa, while maintaining a presence across Europe and Asia to support its global investment banking franchise.

Barclays’ European retail operations will be restructured to focus on the mass affluent customer segment and it will close its Structured Capital Markets business unit.

Investors responded positively to Barclays’ announcements, with shares in the bank rising to a 23-month high earlier today, Bloomberg reported.

Sponsor 3i agrees to sell Canada’s Mold Masters to Milacron in $970m deal

UK private equity firm 3i Group plc (LON:III) on Tuesday announced a CAD975m (USD969.1m/EUR724m) deal to sell Canadian melt delivery and control systems specialist Mold-Masters Ltd to plastics processing solutions provider Milacron LLC.

Georgetown-based Mold-Masters designs and makes advanced hot runner systems, temperature controllers and auxiliary equipment for the plastic sector. 3i made its initial investment of CAD166m in the company in 2007 and has since helped its growth in Asia, Europe and South America through organic projects and acquisitions, it said.

The deal with Milacron was reached at the end of an auction process initiated by 3i late last year, the vendor said, adding it also serves its portfolio restructuring strategy announced last June.

3i will pocket proceeds of some GBP219m (USD343m/EUR256.2m) from its Mold-Masters exit, compared to an opening value of GBP115m at 31 March 2012 and a value of GBP158m as 31 December 2012.

The vendor expects completion of the sale by April 2013, pending regulatory clearances, it said.

Regulators investigate Arris’s planned acquisition of Motorola Home from Google

he US Department of Justice (DOJ) has asked for additional information regarding Arris Group Inc’s (NASDAQ:ARRS) planned USD2.35bn (EUR1.8bn) buy of Google Inc’s (NASDAQ:GOOG) Motorola Home business, the buyer said.

DOJ’s second request for information will extend the Hart-Scott-Rodino (HSR) waiting period for the acquisition by 30 days, Arris said, adding that it and Google are working with the regulator towards a positive solution.

Arris agreed the cash-and-stock deal for Motorola Home in December 2012, saying it would widen its patent portfolio, helping it to offer next-generation consumer video products and services, while stepping up its capacity to provide new products for broadband to a large range of customers.

The buyer still sees the transaction to wrap up in the second quarter of this year, as planned, it said in its current statement.

Completion remains subject to the HSR clearance, as well as approvals in other countries.