Barclays is considering dropping thousands of its less profitable investment-banking clients as a part of a revamp, first reported last week, aimed at reducing £1 billion in costs, the Financial Times reported Tuesday.

Among several strategies the bank has considered is a reduction of as much as 25% of trading assets in Barclays’ investment bank, the Financial Times reported. Those assets would then be redeployed to the consumer and credit card operations, according to the publication, which cited several people familiar with the deliberations. 

The bank is likely to take a less radical course after the plan met stiff opposition from Barclays’ co-heads of trading, the Financial Times reported.

A 25% reduction, all things being equal, would mean the bank could drop more than 2,500 of its 10,000 investment-banking clients. A person close to Barclays characterized that figure as high. The Financial Times’ sources stressed no final decisions had been made. The bank declined to comment on the internal discussions.

The investment bank accounts for £219 billion in risk-weighted assets for Barclays, against which the bank must hold capital, according to the Financial Times. 

Dropping less profitable investment-banking clients could free up as much as £20 billion in risk-weighted assets, at a cost of less than 10% of revenues at the division, the Financial Times reported, citing people close to the matter. The person close to Barclays told the publication the final figure was likely to be lower.

Barclays' board has told the investment-banking division to devise a strategy to generate a 14% to 15% return on tangible equity. That figure is roughly 11.5% now.

A client purge is hardly the only strategy under consideration. Another reportedly involved raising capital to buy a wealth or asset management business.

Back-office job cuts

Barclays identified 900 potential redundancies at its execution services department and informed workers Tuesday of the figure, Bloomberg reported, citing a statement by the union Unite.

A report last week indicated the bank could lay off around 2,000 employees, primarily in the back office.

“We are taking a number of actions to simplify and reshape the business, improve service, and deliver higher returns,” a Barclays spokesperson told Bloomberg. “This includes changes to our headcount as management layers are reduced and the group improves its technology and automation capabilities.”

Potential Metro Bank deal

Another option may include taking on a loan portfolio. Barclays is in exclusive talks to potentially buy a £3 billion mortgage portfolio, according to a Monday report from Sky News. 

Representatives from Metro and Barclays declined to comment to Bloomberg on the topic.