Barclays to announce "bad bank" next week -FT

April 29 Tue Apr 29, 2014 4:20pm EDT

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April 29 (Reuters) - Barclays Plc will say next week that it is creating a "bad bank", hoping to transform its struggling investment banking operations, the Financial Times reported.

The bank will say, as part of a strategic update, that it plans to exit parts of its shrinking fixed income business and its lossmaking European branch network, the paper said on its website, citing sources. (link.reuters.com/xas88v)

It added that the internal bad bank will be run by Eric Bommensath, the co-head of its investment bank.

Barclays declined to comment.

The news comes hours after one of the British bank's top dealmakers quit as head of its Americas business, in another blow to Barclay's investment banking arm. The former Lehman Brothers banker's exit is likely to raise concern that some of his former Lehman colleagues will join him.

His departure coincides with pressure on Barclays Chief Executive Antony Jenkins to cut staff pay after shareholders last week rebelled against a decision to increase bonuses. (Reporting by Richa Naidu in Bangalore; Editing by Robin Pomeroy)

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