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Barclays posts £1.4bn loss as Africa sale, PPI weigh

Hits from the disposal of its Africa business and an additional provisions for payment protection insurance (PPI) mis-selling push Barclays into second quarter loss.

 
Barclays posts £1.4bn loss as Africa sale, PPI weigh

Update: Barclays (BARC) posted a loss of £1.4 billion in the second quarter as it took heavy hits on the disposal of its Africa business and set aside an additional £700 million for payment protection insurance (PPI) compensation.

The one-off hit on selling its majority stake in the bank’s Africa business hit the hardest with Barclays reporting a loss after tax on the division of £2.2 billion.

Meanwhile, the PPI writedown pushed the bank’s UK operation to a £285 million loss, compared to a £470 million profit in the first quarter, while total revenue dipped 15% to £5.1 billion. Barclays shares fell 1.8p to 206.8p.

The dividend was maintained at 1p, with a commitment to a total 3p over the year, in line with last year's payout.

Despite the negative numbers, chief executive Jes Staley, who is under pressure over his efforts to identify a whistleblower, posted upbeat guidance and highlighted the progress the bank has made in restructuring.

‘The second quarter saw us complete two critically important planks of our strategy; both of them ahead of schedule,’ he said.

‘First, we reduced our majority shareholding in Barclays Africa Group Limited to a level which allows us to apply for regulatory deconsolidation, and we expect to achieve that in 2018.’ The sale boosted its financial strength with a common equity tier one (CET1) ratio rising to 13.1% and expected to improve a further 0.26%, he said.

He added: ‘Second, we completed the accelerated rundown of our non-core unit to below our target of £25 billion in risk-weighted assets, allowing us to close it six months early and incorporate the residual assets back into the core.

‘Accomplishing both of these milestones marks an end to the restructuring of the Barclays group, and brings forward the date when our shareholders can benefit from the full earnings power of this business.’

Laith Khalaf, senior analyst at Hargreaves Lansdown, said that while closing down the non-core business was a significant landmark, the pressure was now on Barclays management to deliver better performance.

'To that end the figures for 2017 are far from convincing, with the core bank floundering, and progress actually coming from the non-core,' he said.

'The market will be hoping for a bit more positive news in the remainder of the year, though conduct issues may well overshadow the bank's performance.' 

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2 comments so far. Why not have your say?

Andrew Stevenson

Jul 28, 2017 at 12:05

Always jam tomorrow...

This time next year they will be announcing all the billions they've had to hand over to the USA in fines, plus because they only seem to employ crooks there will be a whole new lot of scandals uncovered.

report this

Anonymous 1 needed this 'off the record'

Jul 30, 2017 at 16:55

Each year a new scandal and even more fines.

I wonder if bank scandals were an industry then the share price in any bank would be a must

report this

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