Fri | Jul 20, 2018

Barclays bank ahead of schedule in recovery plan

Published:Friday | February 24, 2017 | 12:00 AM
A view of Barclays headquarters at London's Canary Wharf financial district.

Banking group Barclays said Thursday it will complete its restructuring plan six months early as it sheds risky assets and focuses on consumer, corporate and investment banking in New York and London.

Barclays Group now plans to finish selling businesses that are not part of its main markets by the end of June. They include retail banking in continental Europe and corporate banking in Africa and the Middle East, among others.

Shares rose more than four per cent in early trading in London to 239.95 pence.

The bank says its core businesses, which mainly focus on the United Kingdom and United States and markets, posted fourth-quarter net income of £649 million (US$808 million), compared with a loss of £1.24 billion a year earlier. Group net income, including the non-core business, was £99 million versus a loss of £2.42 billion.

"In short, we have accomplished a lot in a year," CEO Jes Staley said. The bank, he added, can soon begin to move on from its restructuring plan, "shifting our focus solely to the future, and in particular, to how we can generate attractive, sustainable, and distributable returns for our shareholders."

Corporate and investment banking pretax profits were up 14 per cent to £2.7 billion. The bank was also helped by lower costs for bad conduct, dropping from £4.4 billion in 2015 to £1.4 billion in 2016.

"Overall, Barclays is in better shape than it was, and the accelerated timetable for the rundown of its non-core assets will be received positively by the market," said Laith Khalaf, senior analyst at Hargreaves Lansdown. "However, once the bad bank is consigned to the history books, there will be nothing for management to hide behind if the core business is not delivering."

Staley reiterated past remarks that Barclays had no plans to move large numbers of employees to Europe, saying he would use subsidiaries in countries like Ireland and Germany when Britain pulls out of the European Union.

"I don't think any of those plans reflect a dramatic departure from London," he told the BBC. "We may add some people in Dublin. We may add some people across Europe but our core operations and centre will continue to be London. I continue to believe that London will be the financial centre for Europe even without the (EU's) single market and we're committed to the UK."

- AP