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BRITAIN-BANKING-EARNINGS-BARCLAYS
Profits jump at British bank Barclays
LONDON, Aug 1, 2019 (BSS/AFP) – Net profits nearly quadrupled at British
bank Barclays in the first half of the year on reduced litigation costs,
helping compensate for difficult conditions in retail and investment banking.
Net profit of 2.1 billion pounds (2.3 billion euros, $2.5 billion) was a
stellar improvement but when heavy legal costs it suffered in the same period
last year are stripped out, earnings actually slid 15 percent.
Last year Barclays was hit by a huge $2 billion fine to resolve a US fraud
case involving mortgage derivatives sold in the run-up to the 2008 global
financial crisis, as well as the costs of settling claims of mis-selling
consumer credit insurance in the UK.
Chief executive Jes Staley described the bank’s performance as resilient
in what Barclays acknowledged was a difficult market environment and pointed
to the fact it increased its half-year dividend.
“This increase in ordinary dividend reflects the confidence that the Board
and management have in the sustainable earnings generation of our business,”
he said.
But Barclays also noted difficulties in the retail banking segment due to
fierce competition in providing home mortgages, which has pushed down
margins. Revenues from consumer credit cards also declined.
Credit impairment charges in the first half rose to 928 million pounds
from 571 million in the same period last year. While it attributed the
increase to a less favourable economic outlook, the loan loss rate ticked
higher.
The investment bank arm also suffered a poor second quarter, with net
profits sliding 18 percent. Stock transactions fell but bonds rose.
The performance of the investment bank is under intense scrutiny by
shareholders and analysts as activist investor Edward Bramson has been
pushing for it to be restructured.
Barclays shares rose 2.0 percent in morning trade while London’s FTSE 100
index of blue chip stocks slid 0.3 percent.
BSS/AFP/HR/1410