Britain's Barclays will axe 19,000 jobs in the next three years and set up a "bad bank" to house much of its investment banking business and European retail operations as it strives to turn itself around in the face of a trading slump.
Chief executive Antony Jenkins has taken a knife to Barclays' investment bank, once the group's profit engine.
This comes after a slide in revenues, a string of senior departures and a row with shareholders over bonuses.
Under the latest strategic review, Barclays will cut 7,000 jobs from the investment bank and park some €90 billion worth of risk-weighted assets from the division in a bad bank.
The carve-up means that the investment bank will account for no more than 30% of Barclays' risk-weighted assets, down from 50% now.
It will give much greater prominence to Barclays' retail operations in Britain, its Barclaycard credit card arm and its African business.
Jenkins is also parking all of Barclays' European retail banking operations in Italy, France, Spain and Portugal, and some corporate and Barclaycard assets in the bad bank which will house £115 billion pounds of risk-weighted assets.
Jenkins, who took over as CEO in August 2012 after investment banker Bob Diamond was ousted following a scandal over the rigging of benchmark interest rates, laid out a turnaround plan for the bank last year. But the slide in investment bank trading has forced him to accelerate the changes.
As a result of the latest strategic review, Barclays will incur a further £800m of costs.
But by 2016 the bank is hoping it will be able to raise its dividend pay-out ratio to up to 50% of adjusted earnings, compared to current guidance of 40%, and will have stronger defences against potential loan losses.
"This is a bold simplification of Barclays," chief executive Antony Jenkins said in the statement.
"We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage," he added.
Jenkins added that Barclays would become "leaner, stronger, much better balanced and well positioned to deliver lower volatility, higher returns, and growth".