Yahoo Finance Barclays profits drop 10% after bank takes £2.1bn hit for misbehaviour
Profits fell 10 per cent at Barclays in the first nine months of 2018 after the bank paid out more than £2bn in fines and charges.
Pre-tax profit dropped to £3.1bn from £3.5bn in the same period of last year.
So far this year, the lender has been fined £1.4bn by the US Department of Justice over the mis-selling of residential mortgage-backed securities in the run-up to the financial crisis. The group also paid out £400m in PPI charges.
Without those charges, the bank said profits would have been up 23 per cent, to £5.3bn.
Jes Staley, Barclays chief executive, said the results showed the bank was “firmly on track to produce improved returns for shareholders”.
“In spite of macro-economic uncertainty, and particularly concerns over Brexit which weigh heavily on market sentiment, 2018 is proving to be a year of delivery on our strategy at Barclays,” he said.
“We remain focussed on generating improved returns, and on distributing a greater proportion of excess capital to shareholders over time."
Naeem Aslam, chief market analyst at Think Markets, said it looked like there was “still some firepower left” at Barclays, but said: “Brexit is the biggest elephant in the room and the concern is if the bank can occupy any extra market share given that the sentiment over in the U.K is somewhat fragile.”
He added: “Banks such as Metro Bank are aggressively taking the market share by offering better services for mortgages and savings. Given that the Bank of England is on the path of hiking the interest rate, the mortgage business becomes even more sensitive to this development.”
Barclays is facing a battle over the future of its investment arm, with activist investor Ed Bramson, who holds a 5 per cent stake in the operation, pushing for an overhaul of the business.
The bank reported on Wednesday that income from its corporate and investment banking arm was up 19 per cent in the third quarter.
However, analysts said questions still remained as to whether Mr Bramson would continue to pursue his own agenda, which has included a call for Barclays chairman John McFarlane to step down.
