Barclays may slash controversial tax unit

Barclays could scrap its controversial tax structuring unit as a result of its review in a bid to get its house in order following high profile blunders at the bank.

This part of its business, responsible for amassing up to 75% of profits for the bank's investment division arm, is to be scaled back under the bank's Project Transform initiative led by new chief executive, Antony Jenkins, the FT reports.

Jenkins' appointment was made following the resignation of Bob Diamond in July after the bank's admission that it attempted to manipulate the Libor rate. He ordered an immediate review of all Barclays' businesses as soon as he took up the new role

Barclays coughed up £290m in fines as a result of probes by UK and US authorities.

Barclays also recently confirmed that the Serious Fraud Office is probing a series of payments it made in 2008 to Qatar Holding LLC, part of sovereign wealth fund, Qatar Investment Authority.

Rich Ricci, head of corporate and investment banking, has said the bank would look to axe any business it could not justify as 'appropriate' as it looks to address the damage recent scandals have inflicted on its corporate reputation.

'We have to take a fresh look to see if there are products and services in which, given the changing environment, we no longer deem it appropriate to do business, regardless of the financial return. Elements of our tax advisory business have generated negative media and political attention,' Ricci said.

While Jenkins underscored the company's commitment to its investment bank, he insisted that ethical behaviour will become a core focus of future direction, with all activities screened for reputational impact as well as profitability. He admitted that the bank had made serious mistakes in recent years.

Barclays has given strong indications that it is likely to withdraw from selling derivatives products to consumers and small business customers, after the industry-wide furore surrounding the mis-selling of interest rate hedging contracts to small businesses.

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