BCS Barclays PLC

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 results were buoyed by a strong performance from Barclays's investment bank, helped in particular by resurgent bond-trading revenue and a favorable exchange rate. This helped offset lower profit at its U.K. retail arm and higher bad-debt charges at its credit-card business.

The British bank said revenue totaled GBP5.5 billion ($6.72 billion), broadly flat compared with a year earlier. Net profit was GBP414 million in the quarter, down from GBP417 million. Shares rose 1.4% in morning trading, as analysts cautiously welcomed the results which beat profit expectations.

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 cleanse its balance sheet of unwanted assets in 2017.

Mr. Staley on Thursday played down any immediate changes to the bank's structure following Britain's vote to leave the European Union, saying there were no "imminent" moves planned.

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 ticking up. Sterling's fall against the dollar after the Brexit vote helped. Most of Barclays' investment banking returns are generated in New York. The bank's executives ruled out pumping in more capital to expand the investment bank on the back of the better-than-expected returns.

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 subject to negotiations with regulators. "It will take a little bit longer to get that done," said Mr. Staley.

Write to Max Colchester at max.colchester@wsj.com

(END) Dow Jones Newswires

October 27, 2016 06:53 ET (10:53 GMT)

Barclays (NYSE:BCS)
Historical Stock Chart
From Mar 2024 to Apr 2024

Barclays (NYSE:BCS)
Historical Stock Chart
From Apr 2023 to Apr 2024