Barclays Shares Plunge on Profit Drop and 12,000 Job Cuts
Barclays Shares Plunge on Profit Drop and 12,000 Job CutsReuters

The Barclays share price plunged in the midday trading session after the bank revealed a drop in profits and that it is axing 12,000 jobs to cut costs.

Barclays' stock fell by nearly 7% to 255.75p as of midday.

Elsewhere on the FTSE100, HSBC's shares rose by 1.4% while the partly state-owned Royal Bank of Scotland and Lloyds Banking Group's stock prices were mainly flat.

According to Barclays' full year financial results, the bank is axing 7,000 jobs in the UK and 5,000 from across the globe as it aims to pare back its 140,000 total headcount.

It confirmed that it has already told about half of the staff affected.

However, Barclays also confirmed that it increased staff bonuses and incentive rewards to £2.38bn (€2.9bn, $3.9bn) in 2013, from £2.17bn in 2012, despite the bank racking up hefty mis-selling compensation payouts and posting a drop in earnings.

"Barclays headline earnings figures make uncomfortable reading as fourth pre-tax profits slid 86% to £191m as operating costs soared by £1bn during the period," said Ishaq Siddiqi, market strategist at ETX Capital.

"Certainly this is a reading that rattles confidence in CEO Antony Jenkins' ability to turn around the business by changing the culture, re-shaping the balance sheet and repairing the bank's reputation.

"The bank's investment banking division booked £329m losses, another poor reading which will put more pressure on Jenkins to divest the unit or downsize it further.

"What's more worrying is that instead of addressing the loss-making investment banking unit, the bonus pool was boosted by 10% in 2013."