The bank reported pre-tax profits for 2023 of £6.6bn, down 6% from the previous year, attributing the decline to a £900 million charge associated with the restructuring plans.

CEO C.S. Venkatakrishnan outlined the strategy to focus on growing its “higher returning” consumer and corporate businesses while reducing the size of the investment banking division. The bank aims to achieve £2bn in savings by 2026, with the majority coming from cuts to the investment bank and UK retail bank.

Although specific job cut targets were not disclosed, Barclays has already reduced its workforce by 5,000 since October. The restructuring costs include a £340m expense for “rightsizing” the workforce and an additional £88m towards closing branches.

Despite the cost-cutting measures, Barclays emphasised its commitment to investing in the UK. Mr Venkatakrishnan expressed optimism about the UK as a business hub and discussed working with the government and regulatory agencies to revive the equity culture and attract listings, particularly from technology and life sciences companies.

Investors responded positively to the strategy update, leading to a share price increase of over 7% on Tuesday. Barclays anticipates relying on “more stable income streams” from its retail and corporate lending divisions, aiming to increase total income to £30bn by 2026, up from £25.4bn.

The bank’s annual profits were also impacted by a higher impairment charge of £1.9m, signaling increased borrower risk. However, most of this charge was linked to its US credit card business rather than the UK division.

Barclays’ staff bonus pool was affected by the drop in profits, with top performers sharing a slightly smaller pool of £1.2m, down 3% from the previous year. Including deferred bonuses, bankers will share £1.8bn. Mr Venkatakrishnan experienced a 26% reduction in his cash bonus, resulting in an overall pay cut of 10% to £4.6m.

Barclays made substantial payouts to its highest-earning bankers, with 668 individuals receiving more than €1m (£856,000) in 2023. Some 28 bankers received over €5m each, while one unidentified banker received over €11m, more than double the CEO’s pay packet, The Guardian reports.