Barclays annual profit drops to R95bn

File picture: Toby Melville, Reuters

File picture: Toby Melville, Reuters

Published Feb 10, 2014

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London - Barclays Plc said its 2013 underlying earnings dropped by a quarter from the year before to 5.2 billion pounds (R95 billion), below expectations, which is likely to be due to a fall in investment bank earnings.

The British bank will not report its results until Tuesday, but it released the headline number early on Monday.

A preview in the Financial Times included numbers close to the figures released by Barclays.

Other banks, including Deutsche Bank, have reported weak investment bank revenues for the final quarter of last year and Barclays' core fixed-income business is likely to be similarly hit, analysts said.

Analysts are likely to focus on what chief executive Antony Jenkins plans to do to increase cost savings - which could include hundreds of job cuts - and shrink his investment bank.

He is attempting to improve profitability, cut risk and reduce the bank's leverage.

Jenkins is expected to increase cost savings targets beyond the 1.7 billion pounds in annual savings unveiled a year ago.

The bank has cut about 400 jobs in its investment bank in the last two weeks and plans to cut a similar number in its corporate bank. Jenkins is expected to cut staff and branches in the coming years to improve efficiencies.

After raising 6 billion pounds from shareholders in October, Barclays said it would cut the size of its balance sheet by 65-80 billion pounds and Jenkins is expected to increase that target.

The Sunday Times said he could cut the balance sheet by 150 billion pounds.

Jenkins is also due to set new targets on how staff conduct themselves as he tries to improve culture following a string of industry scandals.

Barclays was expected to report adjusted profit before tax of 5.4 billion pounds, according to the average forecast from analysts polled by the bank.

The only other number released on Monday was a statutory pretax profit of 2.9 billion for 2013.

The bank had already said it would take a 330 million pound charge in the fourth quarter to cover litigation and regulation penalties. - Reuters

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