FirstFT: Barclays considers dropping thousands of investment banking clients

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Barclays is exploring a plan to drop thousands of clients at its investment bank as part of a strategic overhaul that is meant to boost profits and cut £1bn of costs.

Barclays executives have met several times this year to thrash out the restructuring, according to people briefed on the discussions. Chief executive CS Venkatakrishnan is under pressure to reduce reliance on investment banking and return more capital to investors, with a public announcement expected in February.

The company’s shares are trading close to their lowest levels since the Covid-19 pandemic, and Barclays’ valuation is among the cheapest of any major global bank.

Barclays executives considered, but ultimately shied away from, several radical options, with the boldest proposal focused on the group raising capital to buy a wealth or asset management business. Read more about the internal discussions on Barclays’ overhaul.

Here’s what else I’m watching today:

• Nato: Foreign ministers gather in Brussels for a meeting chaired by secretary-general Jens Stoltenberg. Discussions are likely to focus on the war in Ukraine.

• UK-Ireland: Ministers attend the British-Irish Intergovernmental Conference in Dublin, with the lack of government in Northern Ireland set to dominate the agenda.

• UK budget: Treasury Committee MPs question economists about the consequences of chancellor Jeremy Hunt’s Autumn Statement last week.

• Economic data: Germany has the GfK consumer climate survey, while online estate agent Zoopla releases its UK house price index, amid signs of strain in the housing market and high interest rates.

• Companies: EasyJet, GB Group, Greencore, Pets at Home and Topps Tiles report. The former bosses of collapsed UK retail chain Wilko and its auditor appear before MPs to explain why the 92-year-old company went bust.

After expanding our ranking of Africa’s fastest-growing companies this year, the FT is seeking entries for the third annual list, to be published in early June 2024. Apply here to be considered.

Five more top stories

1. Qatar said mediators had secured a deal to prolong the truce between Israel and Hamas by two days to allow the release of more hostages held in Gaza. The announcement on extending the initial four-day pause came as Benjamin Netanyahu’s government faced mounting domestic and international pressure to provide more time for hostages to be freed. Read the latest from the war.

2. Exclusive: Some of the world’s biggest consulting firms are asking staff to use burner phones when they visit Hong Kong. Deloitte and KPMG have advised some US-based executives not to use their usual work phones in the territory, a sign of the increasing difficulties global companies face in a city long known as an international business hub. Some senior staff are reluctant to visit Hong Kong as a result of the inconvenience of leaving devices behind.

3. Tesla’s refusal to sign a collective agreement risks undermining the Swedish model of labour relations that has underpinned the country’s success, said the head of the union behind the strike against the car company in the Scandinavian nation. Developed in the 1930s, the model — with employers and unions taking joint decisions on the labour market — is considered central to Sweden’s prosperity.

4. UK Prime Minister Rishi Sunak’s £36bn plan to replace the northern leg of the HS2 rail link is not fully costed and beset by uncertainties, industry experts have warned. Sunak has argued that his “Network North” plan, a series of rail, road and bus schemes, would be a better use of public money, but transport experts and local leaders say many schemes lack business cases or delivery timeframes.

5. Funding for European tech companies is set to plunge by nearly half this year, according to a report by London-based venture capital group Atomico. As US investors abandon the continent amid a global retreat by venture capital, the amount of money raised by tech start-ups in Europe is expected to reach about $45bn in 2023, down from $82bn last year.

The Big Read

The UAE’s transactional approach to the UN’s COP28 climate summit, which kicks off in Dubai on Thursday, has included the hosts planning to offer to develop oil and gas projects with more than a dozen countries during the event’s official talks. But an analysis by the Financial Times shows UAE state companies and funds were also linked to almost $200bn in investments, mostly in green energy, in the year leading up to the summit.

We’re also reading . . . 

Chart of the day

UK shop inflation eased to its lowest rate in more than a year this month as competition increased in the run-up to Christmas and food cost growth continued to fall, according to the British Retail Consortium. Annual shop price inflation slowed to 4.3 per cent from 5.2 per cent in October, the sixth consecutive monthly decline and the lowest rate since June last year.

Take a break from the news

At this time of the year, when northern European weather seems to vary between cold and wet and just wet, can anything surpass the classic Wellington? The FT chooses the best waterproof men’s boots for town and country.

Additional contributions from Benjamin Wilhelm