Net profit group share fell 34% over one year to 2.5 billion pounds, for a turnover up 17% to 13.2 billion.
Barclays reported sharply lower first-half earnings on Thursday, due to provisions for credit defaults in the face of a deteriorating economy. Legal fees, following a costly brokerage error, also weighed on the performance of the British bank.
Net profit group share fell 34% year on year to 2.5 billion pounds, for sales up 17% to 13.2 billion, according to a press release. Chief executive CS Venkatakrishnan said the British bank had generated a “strong semester” which shows “the resilience and the advantage of diversification” in the business.
The group’s income statement shows a charge for impairment of loans of 341 million pounds once morest a reversal of provisions a year earlier, and the total of provisions and legal expenses for the half-year reached 1.8 billion pounds, ten times more than a year earlier. Profit was notably hurt by a net charge of 600 million pounds linked to an over-issue of securities, and the bank is “attentive to the pressures that the rising cost of living will have on our customers and colleagues”, continues M Venkatakrishnan.
The bank announced at the end of March the sale of too many structured securities in the United States, which gave rise to a right of withdrawal for certain buyers, resulting in a possible loss then estimated at up to 450 million pounds. In addition to this cost, the bank anticipates a heavy fine from the American market regulator.
At the end of March, the announcement of the excessive sale of structured securities had brought down the title of the bank, which launched an internal investigation into this unfortunate operation. Barclays is also under investigation by the FCA, the British market authority, into the relationship of ex-boss Jes Staley with the financier charged with sexual exploitation of a minor, Jeffrey Epstein, who committed suicide in jail in 2019.
Mr Venkatakrishnan recalls announcing half-year earnings of 2.25p per share and “the intention to initiate a further £500m share buyback”. Barclays competitor Lloyds also saw its profit melt in the first half with revenue also up and provisions for potential credit losses in the face of economic uncertainties.
