Barclays is reportedly considering withholding bonuses from underperforming investment bankers as a way to address the bank’s drop in capital markets activity. The move, if implemented, could affect dozens of employees and is expected to lead to more departures, exacerbating the company’s retention challenges.
The cuts come amid restructuring and pay cuts at the bank, which has seen its shares underperform its rivals in recent years. Some analysts attribute this poor performance to the bloated investment banking arm of the bank.
There are concerns that bonus cuts could lead to a greater exodus of staff, as the bank has struggled to retain talent in the past. The firm has seen significant departures from its CEOs, driven by the shake-up and pay cuts within investment banking. Barclays executives fear that another mass exodus could be triggered if bonus cuts are implemented.
The head of investment banking previously warned staff against excessive use of capital, highlighting the importance of maintaining a strong balance sheet in these challenging times for banks.
In addition to bonus plans, Barclays has attracted attention for its purchase of the banking arm of the British supermarket chain Tesco for around £600 million. The move marks another development for the bank as it navigates its challenges around bonuses and talent retention.