Barclays is winding down its energy business within its ‘Macro’ trading division, the bank said in an internal memo. The move will affect dozens of jobs at the major business lender company.
According to the statement, the reason for the change is mentioned as, it would require “significant incremental investment” to maintain and grow the business, and that the resources would be better deployed growing other trading businesses.
Barclays energy business, is responsible for the sale and trading of energy-related products, largely derivatives such as oil futures contracts. This sits within the ‘Macro’ division that also trades foreign exchange and interest rate products.
Macro’s energy business accounts less than 2 percent of the overall revenue generated in the market for Barclays.
“Barclays has made the decision to wind-down its Energy business within Macro which will create the additional capacity to invest in and accelerate the growth of our Rates and FX businesses,” a Barclays spokesman told Reuters by email. “We have made the decision to redeploy capital, technology resources and people in our core areas of strength so that we can best serve the needs of our global Markets and Banking clients and earn an attractive return for our shareholders.”
In recent years, weak prices and muted investor appetite for trading related products have made Investment Banks increasingly struggling to make money from commodities such as oil. Commodities-related revenue at the 12 biggest investment banks fell 22 percent in the first nine months of this year due to weak industrial metals trading and lackluster investor interest.
Barclays has been cutting its commodities exposure, by exiting the precious metal business in January and then in May the company announced it would sell its gold vault, one of the largest in Europe, to ICBC Standard Bank.
Google has announced the discontinuation of its Translate service in mainland China due to low usage. It was the tech...Read more