5:26pm UK, Wednesday January 26, 2011
Barclays is planning to axe around 1,000 jobs in its UK retail division while its investment banking arm has been fined by the financial regulator.
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The high street bank said it will be moving its financial planning advice service online due to a continuing move by consumer to manage their investments over the internet.
Barclays said it expects the trend to continue.
Meanwhile, the bank's investment banking arm Barclays Capital has been fined £1.12m by the financial regulator for failing to separate and protect client deposits from its own funds for eight years.
The Financial Services Authority (FSA) said the investment bank had breached regulations by not keeping client money separate from its proprietary account on an intra-day basis.
Under the FSA client money rules, firms must ring-fence client funds in segregated accounts with trust status, to help safeguard the money in case the firm collapses.
Although the client accounts in question were separated overnight, BarCap unknowingly allowed funds maturing from its sterling money market deposits to mix with its own funds for five to seven hours every day.
The FSA argued that, if the bank had become insolvent within those hours, the client money could have been lost.
The violations took place between December 2001 and December 2009, and the highest amount of money at risk was at one point £752m.
The regulator pointed out that no client money was actually lost due to the breach and the bank did not profit in any way from it.
BarCap reiterated this in a statement, saying: "We have worked constructively and in full cooperation with the FSA throughout the investigation.
"The segregation error was corrected on discovery.
"No counterparties, clients, or financial reports were affected and Barclays Capital did not profit in any way."
Barclays retail received a separate £7.7m fine last week for investment advice failings.
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