UPDATE 1-Barclays says branches will shut over time as customers change

* UK branch network will shrink as technology, behaviourchange

* Barclays dismisses reports it will unveil significantreduction

* Bank to take 330 mln pound hit from litigation,regulations in Q4

By Steve Slater

LONDON, Jan 29 (Reuters) - Barclays will close bankbranches in Britain "over time" due to changes in technology andcustomer behaviour, but has no plans for significant closures ora target for how much of its network will shut, it said onWednesday.

The bank was reacting to reports it would shut 400 UKbranches, or a quarter of its network, as part of more cost cutsthat would be announced in fourth quarter results on Feb. 11.

Barclays dismissed that, but said it would take a 330million pound ($547 million) charge in its results to coverlitigation and regulation penalties.

"We have consistently been clear that, over time, there willbe fewer traditional branches as we move to provide bankingservices to customers where and when they find it mostconvenient," a spokesman said.

"This will be driven by the needs of our customers and,therefore, there is not a target for a number of branches to beclosed, nor a time frame for such action."

Barclays has the third biggest branch network in Britain,with 1,593 branches, behind only Lloyds and Royal Bankof Scotland.

Those three banks, and others, are expected to pare theirbranch networks as customers increasingly use internet andmobile platforms and lenders try to raise profitability.

Barclays is trialling smaller sites in Asda supermarkets, which could replace some traditional branches.

The Sunday Telegraph this week said Barclays could cut 400UK branches and 40,000 staff, but said that would be over sixyears, citing sources at the bank.

"The banking industry is going through what I like to call a100-year transformation," Barclays Chief Executive AntonyJenkins said last week in Davos.

But any branch closures could spark a political and publicbacklash, especially in small communities with few banks.

Barclays said it "will never leave a community without theability to transact".

Jenkins is due to lay out a final phase of his overhaul planat next month's results and set new targets on how staff conductthemselves as he tries to improve culture following a string ofindustry scandals.

He aims to cut 1.7 billion pounds in annual costs under astrategic overhaul - dubbed "Project Transform" - he unveiled ayear ago, which involved axing 3,700 jobs, pruning theinvestment bank and shutting nearly one in three branches incontinental Europe.

He is attempting to find more cost cuts, and Barclays will cut several hundred jobs in its investment bank, a personfamiliar with the matter said on Tuesday.

Jenkins will set out eight commitments for the bank toachieve by 2018. He said last week these would form "the lastpiece in this big transformation" he is making at the bank.