After last week’s announcement that Barclays is shedding 7,000 jobs at its investment banking arm by 2016, the bank said suggestions it is also radically pulling back from wealth management are unfounded.

Following last week’s announcement that Barclays is shedding 7,000 jobs at its investment banking arm by 2016, the UK-listed bank told this publication that suggestions it is also radically pulling back from wealth management are unfounded.

A report in the Financial Times newspaper today said that as part of a move to create just four divisions at Barclays as part of a simpler structure, the wealth and investment business of the bank – containing what had once been called Barclays Wealth – will no longer exist as a standalone entity. The report noted – as has been covered by this and other publications – that the bank is also restructuring its network of booking centres and reshaping the business as part of its Transform programme.

The wealth arm is now part of the Personal and Corporate Banking Division announced last week.

A spokesperson for Barclays told WealthBriefing that the strategy of the wealth and investment management business of the bank “remains unchanged” and said performance of this division has been robust, particularly when the cost impact of restructuring is taken out of the numbers.

Recent figures suggest the wealth arm of the firm is progressing. Last week, the bank said its wealth and investment arm logged a 15 per cent year-on-year fall in pre-tax profit to £51 million ($86.2 million) in the first three months of 2014, affected by the cost of its Transform programme. However, when that process is excluded, pre-tax profits rose 22 per cent over that period.

“W&IM’s strategy remains unchanged…we are making great progress in the transformation of the business and are firmly on track to achieve our goal. Our programmes are really starting to impact the business and deliver real efficiencies as evidenced by our Q1 results last week,” the spokesperson said.

Excluding the £22 million of Transform costs, the spokesperson said, operating costs fell by 9 per cent, and the cost-income ratio – a closely-watched barometer of a firm’s margins – narrowed to 80 per cent in the first three months of this year, compared with 85 per cent a year ago. In recent years, the average cost/income ratio of wealth management firms worldwide has hovered in the region of 80 per cent or slightly lower.

Slightly less encouragingly, total client assets at the end of March stood at £198.3 billion, down £3 billion from the end of last year, although recent market conditions have been mixed.

Commentators have in general terms described last week's announcement by Barclays as a bold stroke by CEO Antony Jenkins to reshape the bank and reduce its investment banking exposure - the part of the bank caught in the maelstrom of the recent scandal of rigging interbank interest rates (other banks, it should be noted, have been implicated). Barclays has already rationalised its wealth management operations to cut costs; it has also raised the minimums required for clients to hold a wealth management account, a move similar to that taken by a number of banks facing rising regulatory costs in the UK and overseas.

In last week’s announcement of the restructuring, Barclays said it is to be made up of four main divisions; it will also create a non-core arm for assets where returns do not meet its strategic targets. The four new divisions of the bank are: Personal and corporate banking: a combination of most of UK retail, corporate and wealth businesses; Barclaycard, which the bank says is “a high returning business with strong and diversified international growth potential”; Africa banking: a “longer term growth business with distinct competitive advantages”, and investment bank: an origination led and returns focused business, delivering banking, equities, credit and certain macro products.

The FT article said that Peter Horrell, chief executive of the wealth arm, will now report to Ashok Vaswani, the head of retail banking.

The bank has told WealthBriefing that the job cuts mentioned last week at investment banking will not affect the wealth management operation.