The profits for Barclays Bank falls to £1.69bn

As earnings from its investment bank slumped by half, Barclays has posted a 5% fall in profits for the first three months of the year.

After the bank warned it would be hit by the performance of the division, adjusted pre-tax profits fell to £1.69 billion.

This drop was driven by a significant decline in income of 41% from its fixed income, credit and commodities business as well as changes to the business.

Chief executive Antony Jenkins said the first quarter had seen strong performance from its retail, cards and business banking arms, while a programme of cost reduction had driven underlying operating expenses to the lowest level since 2009.

He said that this week’s review “Will address issues underlying the performance challenges we have recently experienced, including positioning the investment bank for the new operating and regulatory environment”.

The group said that they remain “cautious about the trading environment, we remain focused on structurally reducing the cost base in order to improve returns.”

There were no provisions for compensating customers who were mis-sold Payment Protection Insurance (PPI) – a scandal that has hit businesses across the sector in recent years. As complaint volumes fell through March, Barclays said its pot of money set aside for redress stood at £689 million after it used up £282 million in the quarter. The group commented that as a result, there was ‘significant uncertainty’ about future levels of complaints.

Barclays said pre-tax profits of its UK retail and business banking arm rose 20% to £360 million primarily driven by income growth and lower impairment charges.

Earlier this year, Barclays announced the bonus pool had been raised by 10% to £2.38 billion, however, they also announced a 32% fall in annual profits to £5.2 billion and confirmed plans to cut up to 12,000 jobs this year.

Finance director Tushar Morzaria said pay in the investment bank was down 20% year on year to £1.14 billion, while bonuses ‘will reflect the performance’ of the division.

Barclays have commented that nearly half of the PPI complaints had no record of policies being sold.

 

Posted on Thu 08 May 2014