Post-covid-19 bank retail branches could be used by investment banking and call centre workers, Barclays chief executive Jes Staley predicts.
Staley believes big expensive city offices housing thousands of bank employees may soon be outdated as banks rethink their long-term location strategy.
Such offices “may be a thing of the past,” says the boss of the UK banking giant with some 70,000 staff members worldwide working from home due to coronavirus lockdown measures.
While Barclays and its peers still maintain busy offices in places such as London’s Canary Wharf, the trend away from expensive skyscrapers in financial hubs was underway well before the coronavirus outbreak.
The pandemic is likely to accelerate this trend. “There will be a long-term adjustment to our location strategy,” Staley predicts.
Meanwhile, there’s no indication when Barclays offices and branches will reopen, but the CEO says sites in Hong Kong will be first, followed by Singapore and Tokyo, then Europe, with social distancing measures in place.
Ongoing pressure to cut costs
Barclays has reported a 42% drop in its first-quarter profit. The impact of COVID-19 came late in what was until that point a good quarter.
Statutory profit before tax was £0.9bn and profit before tax excluding credit impairment charges was £3.0bn.
The bank has taken a £2.1bn credit impairment charge which reflects its initial estimates of the impact of the COVID-19 pandemic.
Barclays UK, and Consumer, Cards and Payments (CC&P) showed a resilient income performance in Q1 despite challenges that are expected to remain for the rest of the year.
However, the dismal overall results have intensified existing pressures on the London-based bank to slash costs. Last month, Barclays announced plans to axe 250 jobs as it sought to radically streamline its operations in a bid to cut costs and boost its profits.
The job cut announcement was made as the banking giant revealed it was bringing a number of its sites scattered across the country together. Barclays had previously announced its plans to close a major processing centre in Leeds, which Unite union claimed would affect nearly 1,000 jobs.
Neil Wilson, chief market analyst at Markets.com, said remote working would help banks like Barclays cut their costs.
Staley says his bank is re-evaluating how much office space it needs, as it is now being run by staff working “from their kitchens”.