Barclays to pull out of major commodities trading areas

LONDON/NEW YORK, April 21 Mon Apr 21, 2014 6:52am EDT

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LONDON/NEW YORK, April 21 (Reuters) - Barclays is planning to withdraw from large parts of the metals, agricultural and energy markets as part of a restructuring of its investment bank, a person familiar with the matter said.

Barclays is one of the top five banks in the global commodities business, and it is expected to announce its reduced activities to staff on Tuesday, the source said.

It is expected to involve sizeable cuts to staff, although the source did not specify how many people were likely to go.

The Financial Times, which first reported the cutback, said there would be heavy cuts to the bank's 160 commodities staff.

Barclays declined to comment.

Barclays follows other banks such as JPMorgan Chase and Morgan Stanley in a retreat from commodities as tougher rules make it less profitable, requiring them to hold far more capital than in the past against trading operations.

Barclays Chief Executive Antony Jenkins plans to release full details of a review of the investment banking business on May 8, which could results in losses of thousands of jobs as he strives to cut costs and improve profitability in the business.

The news on commodities will come before then and just two days before Barclays holds its annual shareholder meeting.

The bank, Britain's third biggest, has been criticised at past annual meetings for some of its commodities activities, and investors are keen to see some signs of change from Jenkins.

Barclays has already cut some areas of its commodities business including U.S. power market operations and soft commodities.

Jenkins has been criticised by shareholders for increasing bonuses for investment bankers last year despite a drop in profits. He has undertaken the bank's third review of the investment bank in as many years in response to pressure to cut costs and improve returns, which lag other parts of the business such as Barclaycard.

Analysts are expecting cuts in areas such as credit trading, emerging markets, securitisation, structured credit and equity derivatives.

On Friday, Barclays announced a shake-up of its investment bank management team, including a new head of markets and new co-heads of banking. (Reporting by Steve Slater in London and Emily Flitter in New York; editing by Jane Baird)

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