BARCLAYS boss Antony Jenkins revealed plans to axe at least 3,700 jobs and said there will be "no going back to the old ways" despite handing out £1.85 billion in bonuses to staff.
The scandal-hit bank risked courting further controversy over banker pay as it said the bonus pool will mean each employee gets £13,300 on average, including £54,100 for investment banking staff.
Mr Jenkins insisted the group was ``changing the way we do business“ as he unveiled the results of a strategic overhaul to repair the bank’s battered reputation after a string of scandals.
He is shutting the bank’s controversial Structured Capital Markets tax advisory division and said 1,800 jobs would go in corporate and investment banking and another 1,900 across its European retail and business arm under plans to slash costs by £1.7 billion.
Around 1,600 investment banking jobs have already gone, but Barclays said ``very few“ of the overall staff cuts will impact UK staff.
The bulk of the jobs cull will impact Asian and European equities departments and the European retail arm, with losses in the ``low hundreds“ across the UK.
Mr Jenkins, who was appointed in August after Bob Diamond quit in the wake of the bank’s £290 million Libor rigging settlement, insisted bonuses had been reduced after last year’s series of reputational blows.
The overall bonus pool was lower than the £2.2 billion handed out last year and Mr Jenkins said the bank’s compensation ratio - pay as a proportion of revenues - had fallen to 38% from 42% in 2011 and would fall further to the ``mid-30s“ as part of the overhaul.
He announced he was waiving his bonus for 2012 earlier this month, but said it was not in the interests of investors to ``radically reduce“ pay and bonuses if it could lead to the loss of talent.
He said: ``There will be no going back to the old ways of doing things.
``We never want to be in a position again of rewarding people for activity that’s inconsistent with our values,” he added.
Nearly £2.5 billion of cash set aside to cover mis-selling compensation claims contributed to a plunge in pre-tax profits to £246 million in 2012 from £5.9 billion the previous year.
The bank had £1.6 billion to cover claims relating to payment protection insurance (PPI) and £850 million for interest rate swaps sold to small businesses.
Barclays said profits rose 26% to £7.05 billion on an underlying basis, with mis-selling provisions stripped out and not including movements in the value of its own debt.
Mr Jenkins admitted this year’s results may ``moderate“ after the restructuring, which will cost it nearly £500 million in the first quarter of 2013 alone and £2.7 billion in total over the next three years.
The group said it had seen a ``good“ start to the year so far, but Mr Jenkins braced investors for revenues in the low single digits over the years ahead.
Plans to shrink its investment banking division will see the division contribute less towards overall profits as other areas grow at a faster rate.
Corporate and investment banking contributed 65% of 2012 profits after delivering a 46% leap in pre-tax profits to £4.6 billion.
Mr Jenkins assured the investment bank would remain ``a very large part and an important part of the group“.
``We intend to maintain its position as one of a small group of full service global investment banks,” he added.
The group’s UK retail and business banking division saw profits tumble 71% to £292 million after PPI provisions, although it said profits rose 4% to £1.5 billion on an underlying basis.
It said the average PPI claim stood at £2,750, while it added the group sold around 4,000 interest rate swaps to small businesses of which around 3,000 were liable to potential mis-selling claims.
Investors responded well to Mr Jenkins’s plans to fix the bank’s reputation, with shares rising more than 5%.
His overhaul - dubbed Project Transform - saw the bank broken down into 75 business units, which were examined for both their potential to generate sustainable profit and their ability to inflict reputational damage.
He is leading a campaign to fix the bank’s reputation following the Libor and mis-selling scandals.
But Barclays is facing yet more investigations over its fundraising in the Middle East at the height of the financial crisis, which helped it avoid a government bail out.
Four current and former employees - including finance director Chris Lucas - are being probed by the Financial Services Authority and the Serious Fraud Office over the Qatari investments in 2008.
The US Department of Justice and the US Securities and Exchange Commission also launched a separate investigation in October into whether certain business practices comply with the US Foreign Corrupt Practices Act.
Mr Jenkins recently told MPs he was ``shredding“ the culture and legacy left to him by Mr Diamond, but there are doubts the changes will be radical.
Ian Gordon, banks analyst at Investec Securities, said the investment bank’s results showed Barclays was ``reaping, not shredding, Bob’s legacy“.
``Looking through management jargon, it is surely little wonder that Bob’s successor, Antony Jenkins, rightly plans to secure, and build upon the improving shareholder economics of Barclays Capital,” he added.