Belfast Telegraph

Barclays' profits surge but more cuts ahead

Upbeat: Barclays boss Jes Staley
Upbeat: Barclays boss Jes Staley

By Holly Williams

Banking giant Barclays has cheered its highest half-year profits for nearly a decade, but warned costs will need to be slashed over 2019.

The lender reported an 82% surge in statutory pre-tax profits to £3.01bn for the six months to June 30 as it put hefty mis-selling charges and settlements behind it. On an underlying basis, interim pre-tax profits fell 15% to £3.1bn.

The lender reiterated warnings that keeping a tight lid on costs is a "priority" and said they will need to be reduced over the year to below £13.6bn as it battles against a "challenging income environment".

It revealed 3,000 jobs had been cut in the second quarter out of an 83,500-strong workforce, although this largely affected what the bank described as "non revenue producers".

The first-half statutory profit compares with £1.7bn a year earlier, when it was hit by costs of the payment protection insurance (PPI) scandal and a £1.4bn settlement with US authorities over its sale of mortgage-backed securities in the lead-up to the financial crisis.

The group did not put any further money aside for PPI mis-selling claims, in contrast to its rival Lloyds Banking Group on Wednesday, which revealed another £550m hit.

Barclays said it still had £360m left in PPI cash set aside, but admitted there was increased "uncertainty associated with future claims levels" amid a late surge ahead of the August 29 deadline.

Jes Staley, group chief executive of Barclays, said it was "another resilient quarter of performance".

He added: "Management focus on cost control remains a priority, and we expect to reduce expenses to below £13.6bn for 2019. This all puts us in a position to continue to increase the return of capital to shareholders by declaring a half-year dividend of 3p."

Its statutory results showed £114m in litigation and conduct costs, down from £2bn a year earlier. The pressure on income was felt in its UK retail bank, which saw income fall 2% to £3.5bn as profit margins were knocked amid fierce competition, although this was partially offset by growth in mortgages and customer deposits

Underlying pre-tax profits fell 11% to £1.1bn in the retail bank.

Its corporate and investment bank saw pre-tax profits fall 15% to £1.7bn.

Belfast Telegraph

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