Economy
7% decline in Barclays annual profits due to failing investment arm
Barclays Bank has taken a slight hit in annual six-month pre-tax profits by 7%, as declines in the investment arm affect overall revenue.
However, the bank has still announced pre-tax profits of £3.35 billion, but has been hit by an 18% decrease in income due to its investment side of the business – where it intends to axe 7,000 jobs, as part of a general 19,000 job reduction objective.
Antony Jenkins, Barclays Group chief executive, said, “Performance in the investment bank was impacted by the repositioning under way, as well as difficult trading conditions in the quarter, but it is where we expected it to be at this point.”
Jenkins has also placed the blame on foreign exchange rates, but has reinforced his point that the group knew the decline was coming, and were fairly pleased with the results as a whole.
This is a view supported by analysts, who also expected a greater slump, due to severely bad publicity regarding fines and investigations into fraud, as well as bad debts and cost-cutting.
However, the bank gained a good performance from its personal and corporate banking arm, as well as share prices rising by 4% in early trading on Wednesday.
The overall profit amount has not included the £900 million set aside for payment protection insurance (PPI) repayments, which were wrongly sold to customers.
Barclays is also currently embroiled in allegations relating to ‘dark-pool’ trading, where New York officials have accused Barclays of deliberately misleading clients in regards to the benefits of its dark-pool market, as well as inviting aggressive traders in to take advantage of these clients.
Photo source: Elliott Brown via Flickr
Further Reading:
Barclays shares down 6.5% after lawsuit over high frequency trading
RBS and WPP latest firms to face investor anger over executive pay
Four banks accused of underpaying PPI compensation
Barclays fined over gold price fixings
Third of Barclays shareholders fail to back remuneration package