Bank jobs to go as investment slowdown hits income

BarCap, part of Barclays Plc, will cut about 400 back-office jobs in Asia, Europe and the United States, an industry source said yesterday.

Financial market jitters on the back of Europe's debt crisis have hurt income at trading desks, while client caution has depressed fee income

from capital raisings, hurting overall investment banking income in the second

quarter.

"It is inevitable as we move towards the end of the year, there are going to be redundancies across the board. Most of the big firms will have to trim at some point," said Jonathan Evans, chairman of recruiter Sammons Associates.

BarCap's revenues fell 15 percent in the second quarter from the first, and many rivals saw even steeper falls.

This will result in job cuts across the industry if there is no improvement in the third quarter, bank industry sources have said, as the dearth of deals forces banks to cut costs after an aggressive expansion drive.

A spokesman for BarCap confirmed that it had begun a consultation with staff in some infrastructure functions "which will result in some job losses".

It will continue to hire selectively in parts of the business that are growing, he said.

BarCap has grown fast in the past two years, using its purchase of the US operations of Lehman Brothers to build an Asian and European equities and advisory business.

At the end of June, it had 25,500 staff, up from 21,900 a year earlier.

"Some rationalisation of back office functions is entirely plausible," Exane BNP Paribas said in a note, referring specifically to Barclays.

"However, we see no prospect whatsoever of a reversal of the strategic expansion,"