Barclays profits fall 21% amid restructuring
Barclays profits slumped in the first half of the year as new chief executive Jes Staley pressed on with plans to restructure the bank and retrench from Africa.
The high street bank also took a £400m provision for payment protection insurance (PPI) mis-selling, taking its total bill for the scandal to £7.8bn.
Staley, an American banker who took the helm in December, said he did not intend to tear up his new plan to turn Barclays in to a transatlantic bank in the wake of the vote for Brexit.
Barclays share price was up 3% in early trading at about 150p.
Staley surprised the City in March by cutting the bank’s dividend and announcing plans to sell its long-established business in Africa and focus on the UK and the US.
That decision took a toll on the results in the first of 2016, with the so-called non core division reporting a £1.9bn loss, denting the £4bn of profits in the continuing operations. Overall profits were down 21% at £2bn.
Despite the fall in profits, he said that the parts of the bank which he wanted to keep were performing well and justified his plan. “We remain confident that it is the right plan for Barclays, and see no reason to adjust it, or the pace of delivery, in light of the vote by the UK last month to exit the EU,” said Staley.
“Given the inherent diversification of our business model, coupled with a longstanding conservative approach to risk, Barclays is well positioned to weather any potential economic consequences of that decision. We are very much open for business, and fully committed to supporting our customers and clients, and the real economy, through this period of uncertainty,” he said.
Pages of legal warnings attached to the half-year results remind investors that the bank is continuing to be investigated by the Serious Fraud Office over the way it raised £7bn of capital during the 2008 banking crisis. The bank is contesting a £50m fine from regulators in relation to the matter which was first disclosed in 2013.