Investing.com -- Barclays said Thursday it plans to cut about 5,000 jobs as it works to lower costs, saying artificial intelligence is beginning to deliver efficiencies. The cuts would affect roughly 5% of its workforce.
[We are] structurally reducing the cost base through expected technology-enabled full-time equivalent (FTE) reductions, creating capacity for further investment in the business," Barclays said in its third-quarter results announcement. The bank booked £201 million of structural cost actions in the third quarter, up from £93 million a year earlier, and plans about £300 million more in the fourth quarter.
Shares slid 1.5% in London trading by 07:24 GMT.
Barclays' third-quarter profit before tax rose 12% to £2.3 billion, roughly in line with analyst estimates, and announced a new share buyback of up to £500 million.
Income rose 3% to £7.4 billion, helped by net interest income excluding the investment bank and head office, which rose 7% to £3.5 billion on higher structural hedge income and continued lending growth. Costs rose 1% to £4.6 billion, and the cost-to-income ratio improved to 62% from 63%. Credit impairment charges fell 20% to £0.5 billion.
Earnings per share rose 18% to 12.3 pence, and return on tangible equity was 11.7%, up from 10.6% a year earlier.
The investment banking performance was mixed. Equities income rose 47%, reflecting earlier investment in prime financing and equity derivatives, while fixed income, currencies and commodities income fell 19% in a challenging environment. In the U.K., loan growth in its highest-returning businesses was 7%, with the U.K. Corporate Bank up 14%.
Return on tangible equity at the U.S. consumer bank fell to 10.9% from 13.5% as costs rose 14%, reflecting the Best Egg acquisition.
The new buyback brings distributions announced this year to £2.8 billion, up 46%. Barclays' common equity tier 1 capital ratio was 14.2%.
The bank said it is on track to meet its 2026 targets, including return on tangible equity above 12%, and reaffirmed its 2028 targets, including returns above 14% and more than £15 billion of capital returns over 2026-2028. It expects total costs of about £18.5 billion this year and £18.4 billion in 2027.
Looking ahead, Basel 3.1 rules are expected to add £8 billion to £15 billion of risk-weighted assets on Jan. 1, 2027, cutting the capital ratio by 30 to 55 basis points. A 59 basis point cut in its Pillar 2A requirement should partly offset that.
"I am pleased with the ongoing momentum of Barclays' operational and financial performance," Chief Executive C.S. Venkatakrishnan said.
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