Barclays Profit Takes Hit From Asset Sales -- Update
July 29 2016 - 3:25AM
Dow Jones News
By Max Colchester
LONDON-- Barclays PLC said that net profit in the first half of
the year slipped nearly a third as the bank sucked up losses
selling down unwanted assets and put aside cash to cover an uptick
in bad loans.
Total income was down 9% to GBP11 billion ($14.49 billion) in
the first six months of the year. Net profit fell to GBP1.1 billion
from GBP1.6 billion the year before.
Barclays Chief Executive Jes Staley played down fears that the
bank would be hit by Brexit, saying that he saw "no reason" to
adjust the strategy or the pace of its delivery in the wake of the
vote to leave the European Union.
Barclays is in the process of shedding a range of unwanted
businesses, including a stake in its African unit. That has taken a
toll on the bank's balance sheet, generating GBP1.9 billion of
pretax losses in the first six months alone. The so called
"noncore" unit, which houses the extraneous assets, should be
closed by 2017, Mr. Staley said.
The British bank's bottom line was also hit by rising
impairments in its credit card business and lending to oil and gas
companies. The bank tweaked the way its credit card models
impairments, which resulted in a 36% rise in impairments at its
Barclaycard unit. The bank put aside an extra GBP400 million to
compensate customers sold insurance products they didn't need.
Income at its U.K. retail business was flat for the year, with a
growth in personal banking hit by falling revenue at its profit
engine credit card business. Barclays' corporate and investment
bank saw profit before tax down 16% as revenue in equities slumped
and costs increased.
The bank has been touted as a major loser from the Brexit vote
as its retail operations could come under pressure from a slowing
economy and it may have to shuffle its investment bank to service
some European clients. Shares are down roughly a third since the
start of the year. Mr. Staley reiterated Friday that the bank isn't
going to change course following the vote.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
July 29, 2016 03:10 ET (07:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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