Barclays surges as City welcomes shake-up plans

BARCLAYS shares surged today as Britain’s second biggest bank unveiled an ambitious shake-up including plans to return £10 billion to shareholders in the next three years.

- Simon English

That will involve cost cuts of £2 billion and some inevitable job losses, though the bank declined to say how many more would come on top of 5,000 axed last year.

The bank has just bought most of Tesco Bank to expand in the UK. Questions about its investment banking arm remain however, with some shareholders thinking it too much of a drain on capital.

CEO C. S. Venkatakrishnan said the investment bank is “focused and competitive and will remain part of the bank, though it should be simpler and slimmed down”.

He is “optimistic” about the strength of the UK economy. There is an impairment charge of £1.9 billion, however, up from £1.2 billion last time, suggesting some borrowers are struggling to keep up with loans.

Barclays’ share price has lagged the market for some time. Today, the shares surged 8p, 5%, to 157p as the City digested the shake-up.