Barclays Posts Drop in Profit on Falling Returns at Investment Bank
April 27 2016 - 3:07AM
Dow Jones News
By Max Colchester
LONDON-- Barclays PLC on Wednesday reported a 7% fall in
first-quarter net profit, hit by falling returns at its investment
bank and losses as it continues to shed unwanted assets.
The British bank said net profit in the first three months of
the year fell to GBP433 million, compared with GBP465 million in
the same period last year, on revenue down 11% to GBP5.04
billion.
In a statement accompanying its results, Barclays Chief
Executive Jes Staley said the bank would accelerate the disposal of
"noncore" businesses and try and improve returns at the investment
bank.
The bank is undergoing a revamp under Mr. Staley, who slashed
its dividend, further pared back the lender's investment bank and
is in the process of finding a buyer for Barclays's stake in its
African business.
Like its U.S. peers Barclays's investment bank has been hit as
trading volumes fell in the first part of the year amid volatile
markets. Underlying profit before tax at the unit fell 31% to
GBP701 million in the first quarter, hit by a slump in bond
trading. The bank had already warned investors that results would
be disappointing at the trading division.
Despite the choppy performance Mr. Staley has said he intends to
keep the investment bank roughly in its current shape, sparing the
unit from more drastic downsizing.
"The performance of our corporate and investment bank was
relatively resilient in a tough quarter, but there is more we must
do to improve returns," Mr. Staley said.
The bank's U.K. retail unit also suffered a difficult quarter
with profit before tax slumping 17%.
The bank's noncore division reported losses of GBP815 million in
the first quarter. On Wednesday the bank announced that it has
entered into exclusive discussions with AnaCap Financial Partners
for the sale of its French retail bank operations. Barclays said
that it was continuing to "explore opportunities" for the sale of
its African business. A consortium led by former Barclays Chief
Executive Bob Diamond has said it is raising funds to make a bid
for the business.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
April 27, 2016 02:52 ET (06:52 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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