Barclays Pushed to Loss by Africa Write-Down -- Update
July 28 2017 - 4:11AM
Dow Jones News
By Max Colchester
LONDON -- Barclays PLC on Friday said it swung to a
second-quarter net loss as it took a hit on the disposal of its
Africa operations and higher provisions for conduct costs.
The British bank reported a net loss of GBP1.4 billion ($1.83
billion) for the quarter, compared with a profit in the same period
last year. Excluding one-offs, profit before tax rose to GBP659
million but still came in below analysts expectations. Total income
was flat at GBP5 billion.
Overall the bank's results were mixed. Revenue at its investment
bank fell on the back of muted trading, while its retail division
posted broadly flat sales. Impairments increased at its credit-card
division and the bank took a GBP700 million charge to compensate
customers who were sold insurance products they didn't need.
Barclays is largely finished with the first stage of Chief
Executive Jes Staley's strategy revamp. The bank has completed a
retreat from Africa, retrenched it investment bank and closed its
noncore division, which held billions of unwanted assets.
However, shares have fallen in the last three months as
investors fret whether the new-look Barclays can produce returns.
Dividend rises are still over the horizon, although the bank said
it would update investors at its full-year results in February.
The bank said Friday it now targets a greater than 10% group
return on tangible equity "over time." The group's second quarter
tangible equity was minus 11%.
Over the past year the focus has been shoring up Barclays's
balance sheet. Cutting its stake in its Africa division has helped
push the bank's capital ratio up to 13.1%.
Barclays's closely watched investment bank reported another fall
in revenues. Sales at its bond-trading division fell 8% in the
second quarter, which was better than some analysts were expecting.
Equities-trading revenue was down 11%. Analysts at Jefferies said
that the investment bank returns were "reasonable given peers'
performance."
There are also a series of regulatory issues hanging over the
bank. Barclays is being sued by the Justice Department over its
role in the packaging and sale of toxic-backed mortgages. Mr.
Staley is himself being probed by U.K. regulators after trying to
unmask a whistleblower.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
July 28, 2017 03:56 ET (07:56 GMT)
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