Barclays posts higher profits despite £1.4bn PPI charge
The bank increased adjusted pre-tax profit by 16% to £1.8bn for the three months to September.
Barclays has posted higher profits in the third quarter despite taking a £1.4 billion hit for payment protection insurance (PPI) claims.
The bank increased adjusted pre-tax profit by 16% to £1.8 billion for the three months to September.
However, once litigation and conduct costs are also included in the figure, the pre-tax profit for the period is £246 million, down from £1.46 billion in the same period last year.
Nonetheless, Barclays performed ahead of analysts’ forecasts despite being dented by the provision for mis-selling PPI on loans and credit cards.
The bank had previously announced that it expected to be hit by between £1.2 billion and £1.6 billion in costs related to PPI.
It also hailed a stronger-than-expected performance by its under-pressure investing banking arm.
NEWS: Group CEO Jes Staley talks about our Q3 Results. #BarclaysResults— Barclays Bank (@Barclays) October 25, 2019
In recent months, Barclays has faced pressure from activist investor Edward Bramson to scale back its investment banking operations amid testing trading conditions.
Pre-tax profit from the investment arm jumped by 67% to £886 million for the period, as income in the division also rose by 17% to £2.6 billion.
Group income for the quarter increased by 8% year on year to £5.5 billion as it was buoyed by the investment division.
Meanwhile, Barclays’ UK business reported a 7% slump in pre-tax profit to £1.9 billion for the quarter.
Despite beating expectations, the company warned that “the outlook for next year is unquestionably more challenging now than it appeared a year ago” due to uncertainty in the economy.
Group chief executive Jes Staley said: “These represent another set of consistent and resilient results, and they show the benefits of our diversified model – one which allows us to weather today’s macro headwinds, and grow our businesses and profitability over time.
“As we continue to invest in our digital capabilities across the bank, management’s focus on cost control remains a priority.
“These results show we remain on track to achieve our target of a group return of greater than 9% for 2019.”