Barclays Profit Dented by Costs -- Update
October 27 2016 - 3:59AM
Dow Jones News
By Max Colchester
LONDON-- Barclays PLC said Thursday that third-quarter net
profit slipped as it put aside funds to cover bad debts and
restructuring costs continued to weigh on its bottom line.
The British bank said revenue totaled GBP5.5 billion ($6.72
billion), broadly flat compared with a year earlier. Net profit
came to GBP414 million in the quarter, down from GBP417
million.
The results were buoyed by a strong performance from Barclays's
investment bank, helped in particular by resurgent bond-trading
revenue. This helped offset lower profits at its U.K. retail arm
and higher bad-debt charges at its credit-card business.
Since the start of the year, Chief Executive Jes Staley has
accelerated a plan to reshape the bank around its U.K. and U.S.
businesses. Peeling off unwanted assets has proved expensive but
the bank said it remained on track to shut down its noncore unit in
2017.
Like its U.S. peers, Barclays benefited from market volatility
in the wake of the Brexit vote, which spurred a boom in bond
trading. Total revenue at the investment bank was up 29%, with
fixed-income revenue up 40% from a year earlier at GBP947
million.
However, lower rates took their toll elsewhere. Barclays's U.K.
retail arm slumped to a loss as expenses rose. Income at its
credit-card business--the bank's profit engine--continued to grow
but the lender took a one-off GBP320 million charge to cover rising
impairments.
Barclays also put aside GBP600 million to compensate customers
who were sold insurance products they didn't need.
Over the past few months, the bank has pushed ahead with
shrinking its global footprint, exiting businesses in countries
ranging from Egypt to Italy. The cost of closing businesses weighed
on the bank's bottom line. It also took a GBP150 million charge to
shut down some international office space. Barclays said it would
deconsolidate its Barclays Africa unit within two to three
years.
Overall profit before tax in the quarter rose to GBP837 million
from GBP619 million the year before.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
October 27, 2016 03:44 ET (07:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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