Barclays' Investment Bank Struggles as Activist Investor Circles--Update
April 25 2019 - 3:28AM
Dow Jones News
By Margot Patrick
LONDON -- Barclays PLC reported weak first-quarter earnings in
its investment bank, days before shareholders are due to vote on a
board appointment for an activist investor who wants to shrink the
unit.
The British lender said net profit in its corporate and
investment bank fell 30% from the first-quarter 2018 to GBP582
million ($752 million) from GBP834 million, because of reduced
client activity, lower volatility and fewer corporate deals. The
bank's overall net profit in the quarter was GBP1.04 billion, up
from a GBP764 million net loss last year from regulatory
settlements.
The results ramp up pressure on Chief Executive Jes Staley to
prove the bank's strategic mix of consumer, business and investment
banking can work. Sherborne Investors is asking shareholders to
vote its founder, Edward Bramson, onto the board at an annual
meeting May 2 to trigger a change in strategy.
"We had a weak quarter in investment banking fees," Mr. Staley
said Thursday but noted that its markets business outperformed U.S.
rivals for a sixth consecutive quarter. Barclays, with large
trading businesses in New York and London, is one of the few
remaining European banks attempting to compete with Wall Street
giants such as JP Morgan Chase & Co. and Bank of America
Corp.
Barclays said it is sticking by a 9% target for return on
tangible equity this year and 10% by 2020. Some analysts downgraded
their expectations in recent weeks that the bank will meet those
targets. Barclays said it could cut costs below the current target
if revenue conditions continue to be challenging this year.
In the first quarter, the ROTE was 9.6%. That figure, and the
full-year ROTE targets, strip out litigation and conduct costs.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
April 25, 2019 03:13 ET (07:13 GMT)
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