Barclays to overhaul back office operations to cope with ring-fencing
By Lawrence White
LONDON (Reuters) - Barclays Plc (BARC.L: Quote) is about to overhaul its back office operations under a restructuring to help it comply with new post-crisis rules forcing British banks to ring-fence their retail operations from their riskier business.
It has formed a new company that will operate as a standalone unit providing support services to both of its two main operations when they are formally separated - retail and investment banking, the bank said.
The ring-fencing rules seek to avoid a repeat of the 2008 crisis, when banks' bad bets threatened depositors' cash. While Barclays was not among those that needed a UK taxpayer-funded bailout, the new rules apply to all lenders in Britain that have retail and commercial or investment banking activities.
At Barclays, the aim is that critical support functions could continue to operate smoothly if either of its two main businesses were to run into trouble, while also keeping costs down by not having several separate back-office units, sources involved in the project said.
The overhaul - including the creation of the new company known internally as ServCo - will affect most of the more than 10,000 people who work in Barclays back offices operations in 17 countries around the world.
It will group together the bank's huge operations in India and South Africa that provide technology support and data management, along with functions such as compliance with regulatory requirements, corporate relations, legal affairs and human resources.
While for some staff this will simply involve a change in the name of the legal entity they work for, the sources said it was also likely to lead to some job losses.
Barclays declined to comment on the possible staff cuts or the cost of the restructuring. Continued...