Business World

Monday 17 June 2019

Barclays half-year profits tumble 29pc

The high street lender reported a 29pc fall in pre-tax profit to £1.7bn
The high street lender reported a 29pc fall in pre-tax profit to £1.7bn

Kalyeena Makortoff

Barclays saw half-year profits knocked by a third following a major US settlement and mis-selling provisions, but cheered a turnaround in the final months after dodging further charges.

The high street lender reported a 29pc fall in pre-tax profit to £1.7bn (€1.9bn) for the six months to June 30, while total income for the period was flat at £10.9bn.

Profits were knocked by a £400m PPI charge and a £1.4bn settlement with US authorities over its sale of mortgage-backed securities in the lead-up to the financial crisis - both of which were logged in the first quarter.

When stripped of litigation and conduct costs, half-year pre-tax profits rose 20pc to £3.7bn.

The bank cheered its second-quarter performance, during which it logged no major legal costs or further PPI provisions.

Chief executive Jes Staley said: "It was the first quarter for some time with no significant litigation or conduct charges, restructuring costs, or other exceptional expenses which hit our profitability.

"In effect then, it is the first clear sight of the statutory performance of the business which we have re-engineered over the past two-and-a-half years - Barclays' transatlantic consumer and wholesale bank - and it is a positive sight."

Statutory pre-tax profits for the second quarter came in at £1.9bn, up from just £659m during the same period last year.

Total group income for the second quarter rose 10pc to £5.6bn, while costs fell 3pc.

Mr Staley said the first-half performance overall showed the bank was starting to "demonstrate its true potential and value".

"The numbers we have posted strengthen our confidence that Barclays can deliver attractive and sustainable profits, and in our ability to return a greater proportion of those profits to shareholders over time."

Its corporate and investment bank (CIB) - which has come under the microscope after activist investor Edward Bramson took a 5pc stake in the lender - reported a 17pc rise in pre-tax profits for the half year to £2bn.

Total income from the division rose just 1pc to £5.4bn.

Barclays said it was "too early to provide comments on expected performance" for the group for the second half of the year.

It is forecasting that income from Barclays UK - its retail operations - will "remain steady despite margin pressures", though income at its international division International will depend on investment banking market conditions, noting volatility was low in July.

Barclays shares were up 1.7pc at the start of trading.

Press Association

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