From Agence France-Presse:
Britain’s scandal-hit Barclays bank posted a 68-percent jump in first-half net profits on Wednesday, as it pushed ahead with a major restructuring that will shrink its investment bank division.
Earnings after taxation surged to £1.13 billion ($1.9 billion, 1.4 billion euros) in the six months to June, from £671 million a year earlier, Barclays said in a results statement.
The group also bounced back into profit in the second quarter with a net figure of £161 million, after a loss of £168 million last time around.
Barclays, which has been plagued by a series of scandals in recent years, added that it was buoyed by its personal and corporate banking and its credit card unit, amid a major group-wide restructuring.
Adjusted pre-tax profits however sank seven percent to £3.349 billion in the first half, hit by a 46-percent slump at its investment banking operations.
Barclays had launched plans in May to shrink its investment bank in a radical restructuring which will axe 19,000 jobs across the group over the next two years.
“We committed to simplify, focus and rebalance the group to deliver higher and more sustainable returns across the cycle, while structurally reducing our cost base and strengthening our capital position,” said chief executive Antony Jenkins in the statement.
“We are making encouraging progress in executing this plan. Profits before tax in Personal and Corporate Banking and Barclaycard were up 23 percent and 24 percent respectively.”
He added: “Performance in the investment bank was impacted by the repositioning underway as well as difficult trading conditions in the quarter, but it is where we expected it to be at this point.”
Barclays, which was at the heart of the Libor interest-rate rigging scandal in 2012, also facing investigations along with other major lenders over possible manipulation of foreign exchange trades.
The bank’s ongoing attempts to repair its reputation were hit in June after New York prosecutors sued Barclays for fraud, saying it ran a “dark pool” securities trading operation to the benefit of “predatory” high-frequency traders.
Barclays added on Wednesday that it continued to provide information to the relevant regulatory authorities over the matter.
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BARCLAYS AFRICA HEPS UP 10%
JOHANNESBURG (Reuters) – Barclays Africa Group posted an expected 10 percent rise in first-half headline earnings on Wednesday boosted by its newly integrated Africa operations.
The pan-African lender, majority owned by the eponymous British bank, said headline earnings per share came in at 720.9 cents in the six months to the end of June, compared with a restated 655.7 cents a year ago.
Barclays had flagged headline earnings would rise by between 8 and 11 percent. Last year’s first-half earnings, which did not include profit from its wider African structure, grew by 8 percent. Under a deal concluded last year, Barclays Plc handed over ownership of eight African businesses to its South African subsidiary in exchange for a 62.3 percent stake in a new combined entity that was renamedBarclays Africa Group.
Operations such as Nigeria, Mauritius, Kenya and Uganda were brought under one umbrella but Egyptand Zimbabwe were left out of the deal.
“The Barclays Africa Limited acquisition was earnings accretive, increasing the group’s HEPS by 2.3 percent,” Barclays said in its filing.
Headline earnings from the rest of Africa grew by 34 percent to 1 billion rand, faster than the 6 percent growth experienced in the bank’s biggest market, South Africa.Despite anaemic growth in Africa’s most advanced economy, South Africa’s Reserve Bank has raised interest rates by 75 basis points this year, saying it needed to keep a lid on inflation. Analysts expect that the central bank will maintain its hawkish stance, which may augur well for banking profits but push the number of non-performing loans higher.
Barclays Africa said credit impairments fell 7 percent after a push to rein in bad loans, which spiked in 2013 for most South African banks following a spate of unbridled unsecured lending.
Net interest income – the measure of income from lending – grew 10 percent to 17.2 billion rand as the bank passed on higher interest rates. The third-largest lender on the Johannesburgbourse, Barclays Africa is the first of South Africa’s “big four” banks to report on this season’s earnings. Its trailing five-year EPS has contracted by 1.5 percent, according Thomson Reuters data, lagging an average 4.1 percent growth by peers.
Its shares have gained more than 30 percent so far this year, trouncing a 20 percent advance by Johannesburg’s banking index.
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