Barclays (BARC.L), said on Tuesday it will cut about 100 million pounds ($127 million) in costs from its UK corporate banking business in total by 2026, under broader plans by the British bank to ramp up lending at the under-achieving division.
In February, Barclays said it will refocus on Britain as part of a revamp aimed at beefing up shareholder returns.
Its presentation on Tuesday gave investors a first look inside the UK corporate banking business, one of the five new operating divisions that CEO C.S. Venkatakrishnan split Barclays into to improve transparency on their respective performances.
Barclays is seeking to deepen lending relationships with corporate clients, the corporate banking division’s CEO Matt Hammerstein told analysts, adding that only 35% of its corporate clients borrow from the bank, a rate below that of rivals.
“We believe it is the right time to lean into corporate lending growth in the UK,” Hammerstein said.
The bank will achieve that by lowering pricing on some loans to compete more effectively, without “doing anything silly” in terms of risk or pricing, Hammerstein added.
“In the first quarter we took steps to make our pricing match the market, where we had deliberately priced ourselves out of the market for a while,” he said.
Barclays will achieve the cost cuts through measures such as consolidating its five online access portals for clients into one, he added.
The newly created corporate banking unit serves customers with turnover from 6.5 million pounds up to FTSE 350 businesses, and will also grow income amid the cost-cutting by cross-selling more products to those clients, Hammerstein said.
Ohio-born Hammerstein, seen internally as a future leadership hopeful, joined Barclays in 2004 and has worked in various roles, mostly at its British retail banking business.
Barclays separately remains in conversations with potential buyers for a stake in its UK merchant payments business, Hammerstein said.
It earmarked the unit for a strategic review last year, with Hammerstein saying on Tuesday Barclays is not best placed to keep up with the pace of technology investment in the sector.
Barclays has shifted focus to private equity firms as potential buyers after overtures to trade buyers yielded muted interest.
