Barclays Swings to Profit as Restructuring Nears End -- Update
February 23 2017 - 04:00AM
Dow Jones News
By Max Colchester
LONDON-- Barclays PLC swung to a full-year net profit of GBP1.6
billion ($1.99 billion), as the bank's management said it was just
months away from finishing a restructuring program.
The British bank on Thursday said total income was down 3% over
the year to GBP21.5 billion, as the bank continued to exit
businesses. However, the bottom line was helped by a surge in
revenue at Barclays's investment bank, in particular bond trading,
and a steep fall in litigation costs.
Shares in the bank, which reported a loss of GBP394 million for
2015, gained about 3% in early trading.
Barclays Chief Executive Jes Staley said the sweeping overhaul
he launched at the bank last year is drawing to a close. "We are
now just months away from completing the restructuring of
Barclays," he said in a statement.
On the American banker's watch Barclays has pared back its
presence in Africa and Asia, and is now more focused on its U.K.
and U.S. operations.
In the latest sign of progress, the bank said it expects to
close its "noncore" unit in June this year, six months earlier than
expected, after selling down businesses from France to Egypt. The
amount of unwanted assets folded back into the bank will be GBP25
billion, slightly larger than what most analysts had expected.
Barclays also said it was "on track" to deconsolidate its
African business from its accounts. It has agreed on a GBP765
million separation agreement with its African business, which must
now be approved by South African regulators.
When he launched his strategy Mr. Staley decided to bet on
Barclays struggling investment bank. The unit has since pumped up
Barclays's bottom line. Barclays's corporate and investment bank
revenue increased 6% to GBP10.5 billion, driven by bond trading and
favorable exchange rates. Investment banks across the U.S. have
benefited from market volatility caused by the election of U.S.
President Donald Trump, the U.K.'s vote to the leave the European
Union and the prospect of rising interest rates. However, revenue
at Barclays's investment bank sagged in the fourth quarter.
Revenue at its U.K. retail business ticked up 2% for the
year.
Overall bad loans grew 38% over the year, mainly because of the
bank's credit-card business outside the U.K.
Barclays also Thursday disclosed pay metrics, which showed total
bonuses fell 1% to GBP1.53 billion for the year.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
February 23, 2017 03:45 ET (08:45 GMT)
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