(Rewrites throughout, adds details on bank's performance,comments)
NEW YORK, Feb 25 (Reuters) - Britain's Barclays Plc said on Tuesday it has closed its U.S. and European powertrading desks, further reducing its activity in commoditiesmarkets.
Barclays, a top-five banking player in commodities trading,said that its "core commodities franchise continues to operatebusiness as usual".
"We will continue to actively manage our existing books tominimize any impact on our clients' business," the bank said ina statement.
The 10 or so employees on the desks will remain withBarclays for the time being, a source familiar with the banksaid.
Like other large investment banks, Barclays faces regulatorypressure to shore up capital and curb proprietary trading, whichhas eaten into profits and driven top trading talent toprivately-held commodity trading houses.
Barclays, which is shrinking its investment bankingactivities, has reduced its activity in the power trading sectorin recent years.
It scaled back its European energy desk in 2013 when itshead of energy research left the company. In 2012, its commoditytrading chief, Roger Jones, left to join Swiss trader Mercuria.
"It isn't a surprise. This has been coming our way for awhile as the power desk has been getting smaller for some timenow," said one source with the bank's energy business.
"With all the other banks exiting, it was almost a surprisethat we held on so long."
The exodus continued at the start of 2014, with JamesGrove, the Barclays' head of commodities in Asia, leaving thebank in January. London-based managing director for powertrading Patrick Barouki also left during the latest rounds ofdepartures, sources have said.
Barclays has cut its commodities trading staff by more than20 percent, sharper reductions than those seen in its fixedincome, currencies or equities trading.
It plans to cut hundreds more jobs in its investment bankingdivision this year.
Five months ago, U.S. federal energy regulators filed alawsuit in a California federal court to recover some $435million from Barclays for alleged power market manipulation, acharge which the bank disputes. (Reporting by Jeanine Prezioso in New York and HenningGloystein, David Sheppard and Dmitry Zhdannikov in London;Editing by Sophie Hares)
Barclays (BARC)
