* CEO's strategic plan released with 2012 results on Tuesday0700 GMT
* Plan will shrink investment bank, may axe 2,000 jobs
* New CEO Jenkins to focus on returns, costs and improvingstandards
By Steve Slater
LONDON, Feb 12 (Reuters) - Barclays' new boss isexpected to shrink his investment banking and Europeanoperations and stop activities that could damage the troubledBritish bank's reputation as part of a revival plan to beunveiled on Tuesday.
Chief Executive Antony Jenkins, a retail banker who waspicked at the end of August to run the bank after a string ofproblems, is expected to tell investors he will cut somebusiness lines and axe about 2,000 investment bank jobs to slashup to 2 billion pounds ($3.2 billion) of annual costs.
He will also promise profound change in standards andculture, criticised as too lax after a $450 million fine forrigging Libor, the mis-selling of products to millions ofcustomers and investigations into whether Barclays providedenough disclosure in fundraisings from Middle East investors.
"The key challenge is how does Barclays improve return onequity at the same time as reducing the risk profile of thegroup," said Gary Greenwood, analyst at Shore Capital.
"Barclays may well be a smaller business. The issue iswhether management can shrink the group's capital requirementswhile maintaining or growing profit."
Jenkins, 51, will unveil his grand plan shortly after thebank releases 2012 results, which will show the scars ofregulator fines and provisions for mis-selling, offsetting adecent underlying performance in its core UK banking business.
He expects "Project Transform" will take five to 10 years torebuild his bank, and has told staff they should leave if theydo not want to sign up to the new standards.
Jenkins will keep Barclays' investment bank, whichcontributes more than half of group earnings, but could cut itsassets and pull back from areas like equities and advisorybusiness in Asia. Up to 10 percent of its 23,300 staff could go,and Jenkins is expected to cut pay across the unit.
Costs across the group are expected to be cut by between 1billion and 2 billion pounds, or 5-10 percent of its 19 billionpound cost base, analysts estimate.
Barclays has said it will close a profitable butcontroversial tax advisory business as part of the attempt toclean up. It could also retreat from areas like the trading ofagricultural commodities.
The bank's capital strength will be under scrutiny astougher new UK and global regulations loom, but Barclays couldreduce any increase in its risk-weighted assets by some 50billion pounds by taking mitigating action, according to AndrewLim, analyst at Espirito Santo.
Barclays will report a 2012 adjusted pretax profit of 7.1billion pounds, up 27 percent from 2011, according to theaverage of 18 analysts polled by Thomson Reuters. Includingmis-selling provisions, its pretax profit would be 4.7 billionpounds, near flat on its comparable basis figure for 2011.
Its annual statutory pretax profit, which includes thoseprovisions and also movement in the value of its own debt, willplunge two-thirds from 2011 to 1.9 billion pounds, according tothe average of 10 analysts' forecasts.