UPDATE 1-Barclays says branches will shut over time as customers change
* UK branch network will shrink as technology, behaviour change
* Barclays dismisses reports it will unveil significant reduction
* Bank to take 330 mln pound hit from litigation, regulations in Q4
LONDON, Jan 29 (Reuters) - Barclays will close bank branches in Britain "over time" due to changes in technology and customer behaviour, but has no plans for significant closures or a target for how much of its network will shut, it said on Wednesday.
The bank was reacting to reports it would shut 400 UK branches, or a quarter of its network, as part of more cost cuts that would be announced in fourth quarter results on Feb. 11.
Barclays dismissed that, but said it would take a 330 million pound ($547 million) charge in its results to cover litigation and regulation penalties.
"We have consistently been clear that, over time, there will be fewer traditional branches as we move to provide banking services to customers where and when they find it most convenient," 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 be closed, 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 Bank of Scotland.
Those three banks, and others, are expected to pare their branch networks as customers increasingly use internet and mobile 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 400 UK branches and 40,000 staff, but said that would be over six years, citing sources at the bank.
"The banking industry is going through what I like to call a 100-year transformation," Barclays Chief Executive Antony Jenkins said last week in Davos.
But any branch closures could spark a political and public backlash, especially in small communities with few banks.
Barclays said it "will never leave a community without the ability to transact".
Jenkins is due to lay out a final phase of his overhaul plan at next month's results and set new targets on how staff conduct themselves as he tries to improve culture following a string of industry scandals.
He aims to cut 1.7 billion pounds in annual costs under a strategic overhaul - dubbed "Project Transform" - he unveiled a year ago, which involved axing 3,700 jobs, pruning the investment bank and shutting nearly one in three branches in continental Europe.
He is attempting to find more cost cuts, and Barclays will cut several hundred jobs in its investment bank, a person familiar with the matter said on Tuesday.
Jenkins will set out eight commitments for the bank to achieve by 2018. He said last week these would form "the last piece in this big transformation" he is making at the bank.