Feb. 12 (Bloomberg) -- Barclays Plc, Britain’s second- largest bank, stopped trading soft commodities such as agricultural products for “reputational reasons” amid job cuts to reduce costs by 1.7 billion pounds ($2.6 billion) a year.
“We have ceased trading soft commodities, such as agricultural products, for speculative purposes as we do not see this activity as being compatible with our purpose,” Antony Jenkins, the bank’s chief executive officer, said in a press conference call today. The lender is exiting soft commodities trading for “reputational reasons,” he said.
Barclays will cut 3,700 jobs as Jenkins revamps the lender following its first full-year loss in two decades. About 1,800 positions will go this year at its investment bank and 1,900 in its loss-making European consumer and business banking unit, Jenkins said in a statement. The lender posted a net loss of 1.04 billion pounds for 2012, wider than the 307 million-pound estimate of nine analysts surveyed by Bloomberg, as it set aside an additional 1 billion pounds in the fourth quarter for compensating clients wrongly sold interest-rate swaps and loan- repayment insurance.
The so-called softs will be the only commodities business that Barclays is exiting, Jenkins said. The bank will also close its structured capital markets business due to “reputational reasons,” he said. Barclays suspended research in agricultural commodities including soybeans and sugar last month, two people familiar with the decision said on Jan. 28. It was yet to decide whether to stop the research permanently, said one of the people, who declined to be identified because the information wasn’t public.
Jenkins, 51, took charge in August after the bank was fined a record 290 million pounds for attempting to manipulate the London interbank offered rate, or Libor. He is seeking to return the lender to profit and avoid repeating regulatory missteps, such as the Libor case, that led to the resignation of his predecessor, Robert Diamond.
--With assistance from Howard Mustoe in London. Editors: Sharon Lindores, Nicholas Larkin