Barclays first-half net profit soars amid restructuring

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br ARCLAYS-RESULTS-_0730_11 Reuters A worker rides a public hire bike, sponsored by Barclays, in the City of London yesterday. The second-biggest British bank said its first-half earings after tax rose 68 percent, but it suffered a 50 percent fall in second-quarter pretax profit at the investment banking division as it scales down the unit following a series of scandals. Photo: Reuters

Sapa-AFP London

BRITAIN’S scandal-hit Barclays bank posted a 68 percent jump in first-half net profit yesterday, as it pushed ahead with a major restructuring that will shrink its investment banking division.

Earnings after taxation surged to £1.13 billion (R20.3bn) in the six months to June, from £671 million a year earlier, the second-biggest UK lender said.

The group, which has been plagued by a series of scandals in recent years, bounced back into quarterly profit with a net figure of £161m in the second quarter, after a loss of £168m last time around.

Barclays said it was buoyed by its personal and corporate banking business and its credit card unit, amid a major group-wide restructuring.

Adjusted pretax profit, however, sank 7 percent to £3.349bn in the first half, hit by a 46 percent slump at its investment banking operations.

Barclays launched plans in May to shrink its investment bank as part of a restructuring that will axe 19 000 jobs across the group in 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,” chief executive Antony Jenkins said yesterday. “We are making encouraging progress.”

Quarterly pretax profit rose 23 percent in personal and corporate banking and 24 percent at Barclaycard, but it fell 50 percent at the investment bank.

“Performance in the investment bank was impacted by the repositioning under way, as well as difficult trading conditions, but it is where we expected it to be at this point,” Jenkins said.

Barclays was at the heart of the scandal over rigging of the London interbank offered rate in 2012 and faces investigations along with other major lenders over possible manipulation of foreign exchange trades.

Last month New York prosecutors sued Barclays for fraud, saying it ran a “dark pool” securities trading operation to the benefit of “predatory” high-frequency traders.


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