LONDON: Britain’s scandal-hit lender Barclays posted surging first-half net profits yesterday, sending its share price soaring, as it pushed ahead with a restructuring that will shrink its investment bank division.
Earnings after tax surged 68 percent to £1.13bn ($1.9bn) in the six months to June. That was up from £671m a year earlier, Barclays said in a statement.
The group also bounced back into profit in the second quarter with a net figure of £161m, after a loss of £168m last time around.
Barclays, which has been plagued by a series of scandals in recent years, added that it was buoyed by its personal and corporate banking and its credit card unit, amid a major group-wide restructuring.
In response, the bank’s share price leapt to the top of the London stock market, gaining 4.08 percent to 228 pence on the capitals falling FTSE 100 index.
Adjusted pre-tax profits however sank seven percent to £3.349 billion in the first half, hit by a 46-percent slump at its investment banking operations.
The lender also took a fresh £900m hit to cover compensation for the mis-selling of payment protection insurance, taking its total PPI bill to almost £5bn.
Barclays had launched plans in May to shrink its investment bank in a radical restructuring which will axe 19,000 jobs across the group over the next two years.
“We committed to simplify, focus and rebalance the group to deliver higher and more sustainable returns across the cycle, while structurally reducing our cost base and strengthening our capital position,” said chief executive Antony Jenkins. “We are making encouraging progress in executing this plan. Profits before tax in Personal and Corporate Banking and Barclaycard were up 23 percent and 24 percent respectively.”
He added: “Performance in the investment bank was impacted by the repositioning underway as well as difficult trading conditions in the quarter, but it is where we expected it to be at this point.”
Jenkins also noted that staff numbers across the group were now at their lowest level since 2007.
AFP
