Barclays Plc said commodities trading staff shrank by a third as value-at-risk, a measure of how much the bank estimates it might lose in a single day, was cut in half last year as the lender revamped its business.
The commodities unit has largely completed restructuring and will focus on “core banking, financing and risk management,” Chief Executive Officer Antony Jenkins said on a conference call today. The bank said it stopped “speculative” agriculture trading.
“As a result of these actions, trading headcount in commodities is a third lower and the average value at risk for this business reduced 50 percent in 2012,” Jenkins said on the call.
Jenkins is reshaping Barclays after a 290 million-pound ($454 million) fine for interest-rate manipulation and today announced plans to cut 3,700 jobs to reduce costs by 1.7 billion pounds a year. Barclays rivals including Deutsche Bank AG are also reducing commodities trading because of tighter regulation in Europe and the U.S.
Daily average commodity value-at-risk fell to 6 million pounds from 12 million pounds in 2011, the bank said today.
Full-year total income from fixed income, currencies and commodities rose 17 percent to 7.4 billion pounds on “increased liquidity and higher client volumes,” the bank said. Fourth- quarter revenue was 50 percent higher from the year-earlier period and 8 percent lower than the preceding three months, it said. Barclays doesn’t break out commodities revenue.
Morgan Stanley said last month revenue in commodities was “de minimus” in the fourth quarter, while Goldman Sachs Group Inc. reported “significantly lower” income.
Deutsche Bank fired 10 to 12 European power and natural gas traders in London and also made cuts in the U.S., according to people with knowledge of the matter.
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