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April 26, 2018

Barclays swings to loss in Q1

Barclays has reported a pre-tax loss of £236m for the first quarter of 2018, compared to a pre-tax profit of £1.68bn reported a year ago.

The banking group posted attributable loss of £764m, as against a profit of £190m last year.

The results were affected by the bank’s settlement with the United States Department of Justice regarding the sale of toxic securities and an extra £400m provision relating to mis-selling Payment Protection Insurance (PPI) in the UK.

Net operating income for the quarter ended 31 March 2018 was £5.07bn, down 4% from £5.29bn in the corresponding quarter of 2017. Operating expenses surged 47% year-on-year to £5.32bn.

The bank’s UK division, which includes personal banking, card and wealth management businesses, recorded attributable loss of £38m for the first quarter of 2018, versus a profit of £470m in the same period last year.

Compared to the previous year, the division’s pre-tax profit slumped 76% to £170m while total income dipped 3% to £1.79bn. Operating expenses at the unit jumped 48% year-on-year to £1.41bn.

The British banking group’s International division reported attributable profit of £973m for the first quarter of 2018, up 16% from £837m a year earlier.

The unit includes the bank’s corporate and investment bank, and consumer, cards and payments.

The division’s pre-tax profit was £1.41bn, a 4% rise from £1.35bn in the previous year. Operating expenses at the unit dropped 5% to £2.31bn from £2.45bn last year.

Barclays CEO Jes Staley said: “This has been a significant quarter for Barclays, one in which we have  shown that our new operating model and our portfolio of diversified, profitable businesses are capable   of producing improved returns for shareholders. Our transatlantic wholesale and consumer bank has produced a Group Return on Tangible Equity (RoTE) of 11.0%, excluding litigation and conduct, with both Barclays UK and Barclays International delivering double digit returns.

“Demonstrating the benefits  of diversification, lower revenues in our UK businesses, driven by one-offs, were offset by a stronger  performance in Barclays International,  particularly in the Corporate  and Investment  Bank,  which reported profit before tax up 49% and a RoTE of 13.0%.”

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