Barclays is winding down its energy trading business, shedding about 40 jobs and close to £100m of revenues, as it removes some of the last traces of its once powerful commodities trading unit.
The move follows the decision two years ago by Barclays to exit physical commodities trading and to pull out of precious metals trading earlier this year, including the sale of its vast gold vault in London to China’s ICBC, writes Martin Arnold.
The energy trading unit, which is part of the macro team in its markets business, trades physical oil and natural gas, as well as derivatives for gas. Most staff in the unit will be offered alternative positions in the bank.
The decision – first reported by Reuters – will not impact the non-core unit of the bank, which contains some £350bn of toxic and unwanted assets, as the energy trading unit will be wound down within the main part of the bank. It produces less than 2 per cent of the £5bn of annual revenues generated by the markets business.
Joe Corcoran, Barclays’ head of markets, told staff in a memo seen by the FT: “We have made the decision to redeploy capital, technology resources and people into our core areas of strength so that we can best serve the needs of our global Markets and Banking clients.”
“This decision is not a reflection on the performance of the energy team this year. Maintaining and growing our energy platform to build scale and stay head of upcoming market structure and regulatory changes would require significant incremental investment.”
He said the bank would continue to provide advisory, financing, rates and foreign exchange services to companies in the energy sector, as well as some commodities services to markets clients – such as structured products and agency derivatives. He added that its commodities research team would continue “but our footprint will narrow”.
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