Barclays has announced a rise in full year profits to £3.2 billion, from £1.1 billion in 2015. Much of this rise was down to lower conduct costs, PPI in particular, with the overall bill falling from £4.4 billion in 2015 to £1.4 billion in 2016.
Underlying profits (excluding one-off items) rose from £6.2 billion to £6.4 billion, though in both UK and international divisions, profits actually fell back slightly. Barclays UK saw underlying profits fall from £2.7 billion to £2.6 billion, and Barclays International saw underlying profits fall from £3.9 billion to £3.7 billion. Barclays also announced it intends to close down its non-core division (the bad bank) six months earlier than planned on 30th June 2017. The bank has also agreed terms with its subsidiary Barclays Africa to further reduce its stake below 50 percent. Barclays announced a final dividend of 2p, taking the total for the year to 3p, down from 6.5p the previous year. Shares rose 3 percent in early morning trading.
Laith Khalaf, Senior Analyst, Hargreaves Lansdown: ‘Lower PPI costs and currency tailwinds have helped boost profits at Barclays, while good progress has been made in winding down the bad bank that has been holding the group back. The performance of Barclays’ core UK and international divisions was somewhat underwhelming though, with underlying profits actually falling back slightly. Overall Barclays is in better shape than it was, and the accelerated timetable for the run-down of its non-core assets will be received positively by the market. 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.’
