Barclays Bets Big on Cost-Cutting
Profit Plummets, Yet Shares Surge
Barclays has just announced a fire‑sale of expenses: a daring plan to shave off another £2 billion in costs by 2026. The news sent the shares buzzing up 5% in a Tuesday morning sprint, as investors cheered a bold reshuffle that promises to trim the bank’s “cost‑to‑income” ratio.
Crunching the Numbers
Last quarter saw profits tumble 92% from £1.3 billion to a mere £110 million. That’s a down‑hill ride for the bank’s bottom line.
The Cost‑Cutting Playbook
- Already invested £1 billion last year on restructuring branches, offices and staff.
- Spun out a £300 million “rightsizing” budget to trim headcount.
- In 2023, roughly 5,000 full‑time roles were cut, though Barclays hasn’t disclosed exact numbers for the new cuts.
- Goal: Keep the ratio of operating expenses to income lean, making the bank leaner and meaner.
Executive Charter
CEO C.S. Venkatakrishnan said, “Our three‑year strategy is crafted to sharpen Barclays’ operational and financial muscles, delivering higher returns and decisive capital payouts.” He hinted that by 2026, the bank aims to return £10 billion to shareholders.
Market Pulse
Research director Kathleen Brooks of XTB described the restructure like a “high bar” push: “Barclays is aiming to build a bigger, better institution—though with a clear warning: more job cuts are coming.” She added that the “punchy” plan—cut costs aggressively, lift profits, and pour capital back to investors—has ticked the box that shareholders love today.
With shares climbing and the plan sounding sharp, the market is already reacting favorably, as the bank gears up to re‑engineer itself for a brighter, leaner future.
