Barclays Third-Quarter Profit Rises
October 26 2017 - 3:22AM
Dow Jones News
By Max Colchester
LONDON-- Barclays PLC Thursday announced an increase in
third-quarter net profit, helped by a fall in conduct and operating
costs.
The British bank said revenue in the quarter was down 5% to
GBP5.17 billion ($6.9 billion) compared to a year ago, as bond
trading revenues slumped. Net-profit rose to GBP583 million from
GBP414 million a year ago.
Like others in the industry, revenue from Barclays's investment
bank was hit by low market volatility. The bank's markets business
revenue slumped by 30% year-over-year. This was somewhat offset by
the bank's U.K. retail and card business.
Barclays clarified its targets, saying it would have a return on
equity of greater than 9% in 2019 and greater than 10% by 2020.
Currently, the bank's return on equity is 5.1%.
Costs in 2019 will be between GBP13.6 billion and GBP13.9
billion, excluding litigation and conduct charges and other
investments. But the bank didn't make clear when it would increase
its dividend. That announcement will likely be made during the
bank's full-year presentation early next year.
"We can now turn our full attention towards what matters most to
our shareholders: improving Group returns," said Barclays Chief
Executive Jes Staley.
After ditching billions of assets, cutting 60,000 staff and
exiting over a dozen countries including most of Africa, the
British bank is moving into the next stage of a plan to shed
costs.
But investors are still to be convinced. Year to date Barclays
has the worst performing share price of any major European bank. A
big question is whether Barclays is capitalized enough to meet new
regulations and any potential settlement with U.S. authorities over
its alleged role in the packaging of U.S. subprime mortgages.
Investors also fret about the amount of resources the bank will
have to pour into its investment bank to make it competitive.
A cloud also hangs over Mr. Staley, who is being probed over his
efforts to unmask a whistleblower who raised flags about a hire the
U.S. banker made.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
October 26, 2017 03:07 ET (07:07 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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