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Barclays share price: European retail unit aims to see profit by 2015, Monday, November 18: Barclays’ (LON:BARC) retail operations in Spain, Italy, Portugal and France will return to profit in two years, the head of the bank’s European retail and business banking division, said last week.

Barclays’ share price was up by around 0.7 percent in mid-morning trading today in London.
“I feel we could probably get to half a billion (pounds) of profitability in terms of my four markets,” Curt Hess told Reuters in an interview on Friday, adding that could be achieved earlier than 2020. Antony Jenkins, Barclays Chief Executive, wants the loss-making European retail business to return to profit in 2015.

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Hess added that his division had not missed anything on the recovery programme including a target to cut costs by more than 20 percent to £650 million by 2015. Britain’s second-largest bank by assets, which had had expanded aggressively in mainland Europe before the financial crisis, has already achieved the bulk of a revival plan set out in February, Reuters noted. Barclays European retail business has lost almost £2 billion pounds over the last four years with Spain, Portugal and Italy having sunk into recession.

Hess told Reuters that he expects his division to deliver return on equity above the cost of capital by 2017 or 2018 after a low return on equity expected in 2015.Under CEO Jenkins’ reform plan Barclays has to cut almost 2,000 jobs across its European retail business and shut 500 branches. So far this year the bank has closed some 440 branches in Spain, Italy, Portugal and France. By the end of the year 1,500 jobs at the Barclay’s branch network in the four countries are expected to have gone as part of the bank’s efforts to trim its overall cost base by £1.7 billion a year, or almost 10 percent.

Speaking along the same lines, the head of retail and business banking at Barclays, Ashok Vaswani, warned last week that he planned a major overhaul of the size, location and functionality of the bank’s branches as more clients make banking transactions online and fewer customers visit branches.
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Vaswani said in an interview with the Financial Times: “I’m a firm believer that branches will survive but the format – where they are located and what happens in them – will change. There is no question there will be shrinkage.”
His comments followed last week’s announcement that Barclays will cut 1,700 jobs at its UK branches as it automates services and cuts costs (Barclays share price: Bank to axe 1,700 staff at branches).
**As of 10:30 UTC buy Barclays shares at 251.05p.**
**As of 10:30 UTC sell Barclays shares at 290.95p.**
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