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Barclays H1 profit falls 20 pct as costs of shrinking bite
July 29, 2016 / 6:25 AM / a year ago

Barclays H1 profit falls 20 pct as costs of shrinking bite

LONDON, July 29 (Reuters) - Barclays reported a 20 percent dip in first-half pretax profits despite improved returns in its core business, as the costs of selling and shrinking the bank’s unwanted assets in a harsh economic environment took its toll on earnings.

The British lender on Friday posted a half-year profit before tax of 2 billion pounds ($2.64 billion) compared with 2.6 billion pounds for the same period a year ago.

The decline in profit came largely from a loss of 1.9 billion pounds in the bank’s ‘non-core’ division of assets earmarked for sale, as the bank ploughed on with plans to dispose of these businesses despite economic uncertainty following Britain’s decision to quit the European Union last month.

Profits from its core businesses including consumer and commercial lending, credit cards and investment banking, were up 19 percent at 2.4 billion pounds.

“Taken together, the picture in the second quarter is one of strong and accelerating progress against our strategy. We remain confident that it is the right plan for Barclays, and see no reason to adjust it, or the pace of delivery, in light of the vote by the UK last month to exit the EU,” CEO Jes Staley said in a statement.

Confidence in Britain’s economic outlook has dropped sharply since voters opted to quit membership of the European Union last month, triggering a fresh bout of pessimism in a sector bruised by costs of tightened regulation and record low interest rates. ($1 = 0.7589 pounds) (Editing by Simon Jessop)

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