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Barclays sees 25 rise in profits

Article By: ,  Financial Analyst
July 30, 2015 7:36 PM

Less than a month after chief executive Antony Jenkins was sacked over a strategy row, Barclays bank has reported a statutory pre-tax profits of £3.1 billion for the six months to the end of June – that's a 25 per cent rise compared to £2.55 billion last year.

The bank has also set aside an extra £859 million to cover compensation claims – such as those for mis-sold payment protection insurance (PPI). That brings the total that Barclays has set aside for PPI mis-selling to £6 billion, reports the BBC.

In April, Barclays set aside £800 million to cover potential legal action and penalties for foreign exchange manipulation – that resulted in a 26 per cent fall in its first-quarter statutory profits.

John McFarlane, the new chairman at Barclays, is expected to set out plans to speed up reform at the bank. 

Part of the Barclays profit – £496 million – can be attributed to the sale of assets it bought in 2008 after the collapse of Lehman Brothers. The bank also says it plans to maintain its dividend at 6.5 per cent this year – equal to the amount paid in 2014. 

Faster turnaround

Mr McFarlane has indicated that he believes the turnaround for Barclays is not happening fast enough. He is set to take on executive duties and push for higher returns while he is in charge. The bank is also working on recruiting a new chief executive, but that's not expected to be finalised until early in 2016.

According to Mr McFarlane, Barclays needs to accelerate growth in earnings, return on equity and capital generation. He said: "There is more that can be done to deliver better results for shareholders, faster, and that work has begun."

Last May, the bank announced that there would be 19,000 redundancies and since the departure of Mr Jenkins, there have been rumours that more jobs could be on the line – however, sources have told Reuters that no new targets have been established.

Mr McFarlane has, however, announced that the bank would be speeding up the process of mothballing or selling non-core divisions.

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