Barclays hints at big cost cuts as margin pressure intensifies
By Lawrence White and Iain Withers
LONDON (Reuters) -Barclays hinted at major cost cutting later this year as the British lender warned competition for savers' money was eating into its margins, even as it reported quarterly profit that narrowly beat expectations.
Facing a downbeat outlook especially in its home market, the bank said it was «evaluating material structural cost actions» to help improve returns, which could incur hefty charges as soon as the fourth quarter this year.
«These results are likely to lower market expectations further for UK banks, and we see a negative read-across for Lloyds (LON:LLOY) and NatWest,» banking analysts at JPMorgan said in a note.
Barclays shares fell nearly 7% in early trading, while shares in rivals Lloyds and NatWest each dipped around 3%.
Barclays Chief Executive C. S. Venkatakrishnan told reporters on a conference call that the company would look for efficiencies in different parts of the bank, without giving details.
The lender kicked off a strategy review earlier this year aimed at reviving its share price and has already started trimming costs, including cutting hundreds of jobs, while Reuters reported it is exploring options for its payments unit.
Banking analysts at Jefferies in a research note asked readers if they were «Looking forward to the Nth restructuring?,» in reference to Barclays' string of cost cuts, asset sales and strategy tweaks since the 2008 financial crisis.
SLUGGISH INVESTMENT BANK
The lender reported pre-tax profit for the July-September period of 1.9 billion pounds ($2.33 billion) on Tuesday, down from 2 billion pounds a year ago but above a consensus analyst forecast of 1.77 billion pounds.
Barclays reported a 6% drop in income at its investment
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