Barclays quits Australia, 80 jobs set to go

Barclays has executed a rapid exit from the Australian market, as the investment bank seeks to cut costs by slashing jobs across the Asia-Pacific region.

Local staff were on Thursday told the bank would be quitting the Australian market, effective immediately, and about 80 staff are expected to lose their jobs as a result of the closure. The move was first reported by The Australian Financial Review's Street Talk column.

Barclays will quit the Australian market with about 80 staff set to lose their jobs.
Barclays will quit the Australian market with about 80 staff set to lose their jobs. Photo: Bloomberg

The withdrawal, alongside the bank's exit from other markets in Asia, is part of push by newly-installed chief executive Jes Staley to focus more on the bank's most profitable lines of business.

About 230 jobs are expected to be cut across the Asia Pacific region, with operations also set to be closed in Taiwan, South Korea and Malaysia, according to reports.

Investors were awaiting a formal announcement in London at the time of publication.

The bank was also closing entire lines of business across Asia including cash equity research, sales and trading, and convertible bond trading, as part of plans to cull more than 1000 jobs globally, the Financial Times reported.


The bank's Hong Kong office did not confirm or deny the cuts when contact by Fairfax Media on Thursday. "We are constantly monitoring our opportunities in different geographies and businesses over the cycle. If any firm decisions are made, we will provide an update," a spokeswoman said.

The Barclays exit follows the withdrawal Canada's GMP from the local market and Commonwealth Bank of Australia's decision last month to shut its institutional equities division and capital markets business. Malaysia's CIMB retreated from Australia last year and Nomura dismantled its local institutional equities franchise.

Barclays UK rival Royal Bank of Scotland under Australian chief executive Ross McEwan has also wound down its presence in Australia.

CLSA banking analyst Brian Johnson said new regulation was constraining the activities of the global investment banks.

"If you are a big bank, you now have scale disadvantage because you have to hold more capital," he said

"Basel [regulations] bite at a group level and at a country level. So the bank raising deposits in one country and taking that liquidity and helping fund activities in another country becomes more difficult."

Mr Johnson said the large investment banks were being forced to put more capital aside to support their trading businesses at a time when banks were also forced to increase their holdings of government bonds, which reduced trading volumes.

An investment banking source said: "Across a whole range of industries from commodities through to services global corp are having to cut costs. It's disappointing to see global corporations exiting the Australian market but it is a necessity forced on these companies by the current economic environment.

"The particular competitive strengths Barclays brought to the Australian market obviously aren't in sufficient enough demand in this environment to sustain their business"

Foreign banks are also retreating from more peripheral markets because the wave of global liquidity has squeezed the margins in institutional banking, a trend that has also affected Asia-focused ANZ Bank. The global rout on sharemarkets has also added to the urgency for banks to reassess which markets and business lines they want to compete in.

Barclays, chaired globally by former ANZ Bank chief executive John Macfarlane, has operated in Australia for decades, with a recent focus on investment banking.

Its has advised on deals including last month's purchase of Australia's third biggest private hospital operator, Healthe Care, by China's Luye Medical Group.

The cuts from Mr Staley come before a strategic update that he and Mr McFarlane are scheduled to present alongside the bank's full-year results on March 1.

"This suggests that they are having to be very aggressive to have any chance of boosting returns in the investment bank as a whole and it may imply a lack of patience by the chairman in terms of how long this process will take," said Christopher Wheeler, an analyst in London with Atlantic Equities.

British lenders Standard Chartered Plc and Royal Bank of Scotland have also have made broad cuts in Asia after deciding their operations there weren't profitable enough.

Globally, Morgan Stanley's Australian-born chief executive James Gorman said this week he was "effectively done" with about 1200 job reductions in fixed-income trading after concluding the outlook for the business is poor.

At Deutsche Bank, co-chief John Cryan plans to eliminate about 9000 jobs on a net basis by 2018, while Standard Chartered chief executive Bill Winters plans to cut 15,000 jobs to help save $US2.9 billion by 2018.

The Barclays CEO extended a hiring freeze indefinitely in December after discovering the bank had only cut about 3000 positions since 2012 because it continued "hiring tens of thousands of people every year" during an earlier job-reduction program.

with Bloomberg