Barclays joins Deutsche Bank in fixed income cuts

(Bloomberg) – Barclays Plc is making cuts in its Japanese fixed income business while executive director Jes Staley cuts costs globally to offset weak gains in its market unit.

The British bank fired several vendors and operators in Tokyo, according to people familiar with the matter they asked not to be named for discussing information that is not public. The reductions were made last week, people said.

Barclays joins Société Générale SA and Deutsche Bank AG to reduce its fixed income divisions, dedicated to the bond trade. Banks are struggling with a decade of low and negative rates, which have eroded trade gains, and that seem to have no end as the European Central Bank remains in relaxation mode. Japan has lived a similar environment for years. Deutsche Bank decided to eliminate jobs in high-performance operations last week, while SocGen has focused on deep cuts in its fixed income market division.

The corporate and investment bank of Barclays recorded a 4% drop in first half income to 5.2 billion pounds (US $ 6.4 billion) in August, affected by lower bank fees and a 6% decrease in market revenues. The unit's operating expenses remained stable at 3.6 billion pounds.

Staley has faced criticism from some shareholders regarding the performance of the investment bank, which is a centerpiece of its strategy. The US-born executive director is defending himself against activist investor Edward Bramson, who wants to see a reduction in the investment bank, through tighter control over expenses. The bank eliminated 3,000 jobs in the second quarter and is discarding some businesses, including its automated business options in New York.

A Barclays spokeswoman declined to comment on the Tokyo cuts.

Original Note: Barclays Joins Deutsche Bank in Fixed-Income Trading Cuts (1)

To contact the editor responsible for the translation of this note: Carlos Manuel Rodriguez, [email protected]

Reporters in the original note: Viren Vaghela in London, [email protected]; Harry Wilson in London, [email protected]

Publishers responsible for the original note: Ambereen Choudhury, [email protected], Marion Dakers

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