Barclays PLC Continues Cost-Cutting Drive By Axing Jobs & Branches

barcThe shares in Barclays (LSE: BARC) (NYSE: BCS.US) added 5p to 274p during late trading today after news that it plans to cut hundreds of jobs at its investment bank.

As part of a cost-cutting drive, the UK’s second largest bank has also placed travel restrictions on its staff. Antony Jenkins, the chief executive, has demanded that executives travel internationally only for “essential” discussions with clients and regulators.

Last year the bank cut 1,700 jobs with more on the way as pressure mounts to improve a return on its capital.

Plans are also underway to scale back the number of branches countrywide, as demand changes for services with more people using smart phones and other technology for their banking needs. Barclays presently has just shy of 1,600 branches.

There were also reports this weekend that Barclays was examining the future of its sponsorship of the Premier League. The sponsorship deal which costs £40 million a year is said to have “zero value” by senior figures at the bank. The present deal runs until the end of the 2015-16 football season.

Barclays are planning to move away from such glamourous ventures and instead focus on better technology for its customers. The bank hopes mobile apps and “intelligent ATMs” will improve customer service and reduce cost.

The bank currently has a sponsorship deal with Boris Johnson’s London bike hire scheme that will run until the end of 2015, costing £25 million. Again, as part of a wider review of its commercial relationships, this deal won’t be extended.

Prior to today City experts were expecting Barclays’ upcoming annual results to show earnings at 29p, the shares may therefore trade on a P/E of 9 and offer a possible income of 4.5%.

Of course, whether those ratings, today’s news and with the wider prospects for the banking sector add up to make those shares a ‘buy’ is something for you to decide.

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> Mark does not own shares in Barclays.