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Report: Bramson calls on Barclays to end bulk of i-bank's trading activities

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Report: Bramson calls on Barclays to end bulk of i-bank's trading activities

New York-based activist investor Edward Bramson is urging Barclays PLC to close the majority of its investment arm's trading activities as part of plans to improve returns and reduce costs, Reuters reported May 17, citing three sources familiar with the matter.

Bramson, who has built up a 5% voting stake in Barclays worth nearly £2 billion, wants to shut down all parts of the British bank's investment banking activities that do not directly serve corporate clients. The plan calls for Barclays to retain its merger and acquisition advisory business, along with the equity and debt capital markets team, and discard the cash equities, currency and fixed income trading desks, according to the sources.

One of the sources familiar with Bramson's proposal noted Barclays' trading operations lack scale, absorb too much risk capital and deliver small returns and that the lender should focus on its retail bank and the productive parts of its corporate and investment bank, Reuters said.

Meanwhile, some of Barclays' shareholders told the newswire that Bramson might not have the full picture of the challenges of shutting down the underperforming divisions without impacting the stronger parts of the business. Other investors noted Bramson's plan could result in some corporate clients moving to rivals that offer them the full range of investment banking services.

Bramson's plan is also in stark contrast to Barclays' recent hiring that have particularly focused on the trading business. Michael Lublinsky, head of macro trading; Stephen Dainton, global head of equities; and Guy Saidenberg, head of sales, have all been given internal mandates to appoint more staff and improve revenues to justify the bank's investment in the markets business, according to two sources familiar with the matter.