max temp: 12°C

min temp: 2°C

ESTD 1874 Search

Banking: Profits down at Barclays as investment arm earnings fall by 49%

08:48 06 May 2014

Antony Jenkins, chief executive of Barclays

Antony Jenkins, chief executive of Barclays


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


Adjusted pre-tax profits fell to £1.69bn, with the bank having warned last month that it would be hit by the performance of the division.

The investment bank, which faces a shake-up likely to costs hundreds of jobs when Barclays announces a strategy review on Thursday, saw pre-tax profits fall by 49% to £668m.

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

Barclays chairman Sir David Walker has hinted at a shrinking of the investment banking arm following a controversial rise in its bonus pool last year despite declining profits at the group.

It has also been reported that the group is to create a “bad bank” or non-core unit as it seeks to exit parts of its fixed-income business and loss-making European branch network.

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 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 it remained “cautious about the trading environment” adding: “We remain focused on structurally reducing the cost base in order to improve returns.”

There were no new provisions for compensating customers who were mis-sold payment protection insurance (PPI), a scandal that has hit businesses across the sector in recent years.

Barclays said its pot of money set aside for redress stood at £689m after it used up £282m in the first quarter, adding that overall complaint volumes fell though March saw a spike in those made via claims management companies.

The group said that as a result there was “significant uncertainty” about future levels of complaints.

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

Earlier this year, Barclays announced a 32% fall in annual profits to £5.2bn and confirmed plans to cut up to 12,000 jobs this year. However, the bonus pool was raised 10% to £2.38bn

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

He added that the weakness which had been seen in part of the unit in the first quarter had continued into April.

The investment bank saw 450 redundancies, as previously planned, over the period. The job losses were across Europe, Asia and America and helped push the cost of the group’s “Transform” overhaul to £149m at the division.

Mr Morzaria said he was not announcing any further redundancies but added: “We continue to reassess our footprint as the revenue environment changes.”



Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

Wayne Seddon from The Bridge House in London receives his Adnams Pub of the Year award from chief operating officer Karen Hester.

Southwold-based Adnams has named The Bridge House, near London’s Tower Bridge, as its Pub of the Year.

Bargain hunters are expected to spend freely today, on the high street and online.	                  
Photo: Danny Lawson/PA

Retail spending on Britain’s high streets and online is expected to reach nearly £1.4billion today as “Black Friday” continues to capture the imagination of UK consumers.

A file picture of the Sanofi factory in Haverhill.

More than 50 jobs are to be axed at the Haverhill site of pharmaceutical group Sanofi.

Georgi Rollings, left, and Emma Lawrence of Starfish Accounting.

An Ipswich based provider of online company secretarial software has reached the landmark milestone of having 10,000 users.

Robert Hughes, managing director of Hughes Electrical, and Andy Yallop, store manager, at the company's new branch in Bury St Edmunds.

Hughes Electrical has opened the doors of its new store in Bury St Edmunds following a £200,000 investment which has also created six new jobs, doubling the size of its workforce in the town.

Barclays has been fined £72m by the Financial Conduct Authority.
Photo: Jonathan Brady/PA Wire

Banking giant Barclays has been fined £72million by the City watchdog for failing to handle potential financial crime risks relating to a £1.88billion transaction for ultra high-net-worth clients.

Members of the Suffolk Chamber of Commerce team outside the chamber's offices at Felaw Maltings in Ipswich.

Suffolk Chamber of Commerce is among the nominees in two categories of the British Chambers of Commerce Awards, which are due to be announced at a ceremony in central London tonight.

Ipswich council leader David Ellesmere at the former sugar beet factory site off Sproughton Road.

A new Enterprize Zone involving 10 development sites across East Anglia, with the potential to create 18,500 jobs, was announced by Chancellor George Osborne today.

Natalie Moloney, of Woodbridge events firm Pink Lemonade Productions.

An entrepreneur is up for a fifth business award since her event planning company launched last year.

The Chancellor of the Exchequer, George Osborne, delivering his joint Autumn Statement and Spending Review to MPs in the House of Commons
Photo: PA Wire

The Chancellor’s Autumn Statement and Comprehensive Spending Review today divided opinion between unions employers.

Most read

Most commented

Topic pages

Local business directory

Our trusted business finder

Property search

e.g. Oxford or NW3
Powered by Zoopla

Digital Edition

Read the East Anglian Daily Times e-edition today E-edition

Great British Life

Great British Life
MyDate24 MyPhotos24