Barclays CFO Anna Cross announced on Tuesday that the bank is cutting unprofitable customer relationships and considering further reductions in capital allocated to its investment bank to focus on higher-revenue generating businesses.
During the Morgan Stanley European Financials Conference, Cross noted a rise in corporate deposits, attributing it to assigning a lead treasury banker to each of the top 800 corporate clients. However, she emphasized the importance of making tough decisions to free up capital from less profitable ventures.
Cross stated, "When those facilities come up for renewal, we are asking ourselves very, very difficult questions as to whether or not those client returns are at, or above, expectations." She added, "If we don't believe we can, then ultimately, having a difficult conversation with that client."
Barclays has been working to reduce costs by £2 billion ($2.59 billion) and shift more risk and capital from its investment banking division to its domestic lending and savings sector. Shareholders have supported this strategy, which aims to lower risk-weighted assets in the investment bank to 50% by 2026, down from 63% in 2023.
Cross hinted that the 50% target is not final, suggesting further reductions in capital allocation to reflect their outlook on the investment banking sector and UK economic growth.
She mentioned an improved performance in various financial products in 2024 and highlighted progress in securitized products, equity derivatives, and fixed income financing, along with efforts to regain lost market share in European rates.
Barclays has moved up in prime rankings and is strategically growing its business, with Cross stating, "We've got some real balanced momentum in that business."
($1 = 0.7711 pounds)