View the article online at http://citywire.co.uk/wealth-manager/article/a733317
Barclays Wealth falls to £19m loss
by David Campbell on Feb 11, 2014 at 07:29
Barclays Wealth division plunged from a pre-tax profit of £274 million to a loss of £19 million in 2013 as the bank overhauled its internal processes and management.
While income was broadly stable year-on-year, at £1.83 billion versus £1.82 billion, operating expenses rose 21% from £1.5 billion to £1.82 billion.
The company also put aside £23 million for unspecified ‘customer remeditation' provision and took a £121 million hit on ‘credit impairment’ charges ‘largely reflecting the impact of deterioration in recovery values from property held as security, primarily in Europe’.
Client assets increased 10% to £204.8 billion in the 12 months, while deposits rose 18% to £63.4 billion and customer credit increased 8% to £23.1 billion.
The results follow the first year of Barclays' Transform project, intended to overhaul internal practices and culture in the wake of the Libor rigging scandal.
Profit at the banking group level fell 32% to £5.16 million on restructuring costs, a 4% fall in income and £331 million provision for litigation and regulatory charges related to its investment bank.
At 8.15 shares in Barclays were 1.8% down at 270.2p.
‘These results reflect the implementation of our strategy to restructure our business by building on our strengths, focusing on markets where we can win and simplifying our operating model,’ said Peter Horrell, chief executive for wealth and investment.
‘We are making great progress in dealing with legacy issues and de-risking the business in an increasingly complex regulatory environment.
‘We have already invested a significant amount in the transformation and have taken bold decisions to ensure we have consistent client propositions and sustainable long-term returns. The underlying business remains robust with good growth in our high net worth businesses and growth in client assets.’
The results followed 24 hours after the bank rushed out the headline figures from its results in what it claimed was a response to a Financial Times article.
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