This weekend's press here in the UK is reporting that Barclays will announce this week plans to cut costs, refocus the investment bank and accelerate the sale of non-core assets such as retail banking operations in Italy and Portugal.
The Sunday Times today highlights the Barclay's cost-to-income ratio (or CI in the business) above 60 will be targeted for reduction. With growing compliance and regulatory costs, plus the uncertainty of the status of ring-fencing in the UK, this is tricky but necessary. Many experts feel when comparing CI ratios of banks one needs to consider their business models carefully and as such are not reliable performance metrics (Tripe, 1999). While it is true some banks have better CI ratios (Australian banks average in the 40s, for more see http://www.rba.gov.au/publications/fsr/boxes/2014/sep/b.pdf), European banks have exhibited CI rations in the 70s as recently as last year. Let's see what Barclay's comes out with including any CI targets given the uncertain regulatory environment and timeline for asset disposals to be announced.
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