Barclays will take the axe to its controversial tax-structuring unit, as the British lender seeks to clean up its image in the wake of a succession of scandals.
The business, which at its peak may have generated as much as three-quarters of profits at Barclays’ investment banking operation, will be shrunk dramatically as part of the bank’s Project Transform under new chief executive Antony Jenkins.
“We have to take a fresh look to see if there are products and services in which . . . we no longer deem it appropriate to do business, regardless of financial return,” Rich Ricci, Barclays investment banking chief, said in an address to investors last night.
Mr Ricci also signalled a likely withdrawal from selling derivatives products to consumers and small business customers, following an industry-wide scandal over the mis-selling of interest rate hedging contracts to SMEs.
The tax business has attracted unwelcome attention for at least three years. Although legal, the avoidance strategies it used for clients in Britain were politically controversial. – Copyright The Financial Times Limited 2012
