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Barclays first half profit slides 7

Article By: ,  Financial Analyst
July 29, 2014 4:33 PM

UPDATE:

July 30, 07.16: Barclays reported a fall of 7% in adjusted profits before tax for the first six months of the year to £3.35bn, which the bank said was driven mostly by currency fluctuations and weaker performance in investment banking.

Before adjustments, profit before tax fell 10% to £3.84bn whilst income dropped by 7% to £12.67bn which reflected an 18% drop in investment banking profit. Investment banking income dropped from £5.22bn to £4.25bn for the same reporting period, whilst investment banking profits before tax also dropped 46% from £1.95bn to £1.05bn, representing a healthy chunk of the banks overall income and profit.

Barclays was also setting aside a further £900mn to compensate victims who were mis-sold payment protection insurance.

To read our full analysis on Barclays earnings, please click here.

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July 29, 15.33: Barclays will announce results for the first-half of the financial year tomorrow (30th July), followed by half-year figures from Lloyds Bank on Thursday (31st July).

Investors could be forgiven for letting the fact that Barclays reports regular earnings updates slip their minds, given the seemingly interminable barrage of banking scandals that have battered the world’s seventh-largest bank.

Even so, when all is said and done (at least for now) it will still be important to know, albeit potentially painful, how Barclays has done for the first half and second quarter.

On a half-yearly basis, analysts see net interest income falling 12% to £13.23bn, while pre-tax profits are forecast to fall by a quarter to £2.96bn. Net interest income is the key profit measure used by banks. Barclays’ second-quarter net interest income is expected to be largely unchanged compared to the £6.769B it reported in the first quarter of 2014.

Barclays is likely to reiterate that its efforts to reorganise its business mix, chiefly by shrinking its investment bank, are continuing to take a toll on net income.

In the first quarter of the year, net interest income came in some 11% below forecasts.

Trading in fixed income (which largely relates to bonds), commodities and currencies fell 41% in Q1.

 

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