Barclays tax advice unit to close

BarclaysBarclays boss Antony Jenkins will attempt to break from the bank's scandal-hit past this week by announcing the closure of its tax avoidance unit and the cull of around 2,000 investment banking jobs, it has been reported.

The moves - due to be unveiled alongside the bank's annual results on Tuesday - are part of Mr Jenkins' drive to "shred" the legacy left by former boss Bob Diamond, who quit after the bank's £290 million Libor rigging settlement last year.

According to the Sunday Times, about 10% of the investment banking division's 23,000 staff will be shown the door, while Mr Jenkins will close the Structured Capital Markets division, which gained notoriety for its advice to multinational companies on reducing their tax bills.

The review has broken the bank down into 75 business units and examined both their potential to generate sustainable profit and their ability to inflict reputational damage.

Writing in the Sunday Telegraph, Mr Jenkins said: "Tuesday is an important day in the 320-year history of Barclays. Combined with announcements on purpose and values, our strategy review will set out a fundamentally new approach for a new era.

"It will provide a road map for long-term success and I am confident that, given time, it will show that the understandable scepticism about our commitment to real change was misplaced."

He wants the business to combine its "excellent" retail banking operations with a "high-quality" investment bank, including a strong international presence in growing markets.

However, he is expected to say on Tuesday: "There are some areas that relied on sophisticated and complex structures, where transactions were carried out with the primary objective of accessing the tax benefits.

"Although this was legal, going forward such activity is incompatible with our purpose. We will not engage in it again."

The Libor-rigging scandal and provisions to cover mis-selling claims for payment protection insurance and interest rate swap products mean bottom-line pre-tax profits are expected to slump from £5.9 billion in 2011 to below £1 billion.