BARC Barclays Plc

By Simon Clark 

LONDON -- Barclays PLC posted a profit in 2020 as buoyant securities trading made up for a lackluster banking performance in the U.K., where the coronavirus pandemic caused the largest economic contraction among the world's advanced economies.

Net profit at the London-based bank fell 38% from a year earlier to GBP1.53 billion, equivalent to $2.12 billion. Profit at Barclays's corporate and investment bank rose 29% to GBP2.55 billion.

The results support the strategy of Barclays Chief Executive Jes Staley, who has fended off demands from activist investor Edward Bramson to scale back the investment bank. Mr. Bramson's Sherborne Investors says it owns 5.8% of Barclays. European lenders with large securities-trading units, such as Deutsche Bank AG and BNP Paribas SA, have fared better in the pandemic.

"2020 demonstrated the value of our diversified banking model," Mr. Staley said in a statement.

Barclays is the U.K.'s second-largest lender by assets after HSBC Holdings PLC, operating a large domestic retail and commercial bank as well as a trans-Atlantic investment bank that competes with the likes of Goldman Sachs Group Inc. and Morgan Stanley.

Revenue from its markets unit, which trades fixed-income securities, equities and derivatives, rose 45% to GBP7.61 billion. Its cards-and-payments unit lost GBP388 million in 2020 on impairments and lower economic activity. Barclays shares have risen 5% this year after dropping 18% in 2020.

British banks have been hit hard by the economic impact of Covid-19 after the nation locked down three times and recorded the highest number of deaths in Europe. Prospects are improving with the rollout of a nationwide vaccination program but uncertainty persists, in part because of added challenges due to the country's exit from the European Union.

Barclays set aside GBP492 million in the last three months of the year to cover bad loans, bringing the total for the year to GBP4.84 billion, more than double the amount for 2019.

Mr. Staley has said one growth area is financing renewable-energy projects. The U.K. government wants British banks to take a lead in climate finance as it prepares to host a global climate conference in November. Long criticized by environmentalists, Barclays was petitioned by some of its shareholders in January 2020 to phase out financing of fossil-fuel companies. Two months later, the bank announced a goal of reaching net-zero greenhouse-gas emissions by 2050.

Mr. Staley is also under scrutiny for his professional relationship with a deceased former client from his time working at JPMorgan Chase & Co., convicted sex offender Jeffrey Epstein. U.K. financial regulators said last year that they were investigating the relationship. The U.K.'s Financial Conduct Authority declined to comment Tuesday on the investigation.

In October, Mr. Staley, 64, said he intended to remain at Barclays for "another couple of years."

Barclays said it intends to pay a dividend for 2020 and to buy back up to GBP700 million of shares.

Write to Simon Clark at simon.clark@wsj.com

(END) Dow Jones Newswires

February 18, 2021 02:59 ET (07:59 GMT)

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