Barclays suffers £1.2bn first-half loss from Africa sale

Africa deal aside, bank posted profit before tax of £2.3bn compared with £2bn last year

In Barclays’ investment bank, revenue at the markets division fell 5 per cent in the first half to £2.6 billion

In Barclays’ investment bank, revenue at the markets division fell 5 per cent in the first half to £2.6 billion

 

Barclays reported a £1.2 billion attributable loss for the first half of the year, as it took a £2.5 billion hit from the sale of its Africa business.

The lender on Friday reported a £1.4 billion loss on the sale of 33 per cent of Barclays Africa Group, and a further £1.1 billion impairment charge on the sale.

Barclays in June cut its stake in Barclays Africa Group to 15 per cent, ending more than 90 years as a major presence in the continent as the bank shifts its focus back to Britain and the United States.

The bank also completed the run-down of its noncore division of assets earmarked for sale to below its goal of £25 billion in assets, meaning the remainder can be folded back in to Barclays.

“Accomplishing both of these milestones marks an end to the restructuring of the Barclays Group, and brings forward the date when our shareholders can benefit from the full earnings power of this business,” chief executive Jes Staley said in the statement.

The sale of the Africa unit boosted the bank’s core capital ratio to 13.1 per cent, and the bank said that would rise to 13.4 per cent once the full impact of the disposal is included.

Barclays posted a half-year profit before tax of £2.3 billion compared with £2 billion for the same period a year ago, before the impact of the Africa sale was included.

That was worse than the £2.7 billion average estimate of analysts’ forecasts compiled by the bank.

In Barclays’ investment bank, revenue at the markets division fell 5 per cent in the first half to £2.6 billion, as low volatility caused a 20 per cent fall in earnings at its macro trading business.

Credit trading

That was offset by a stronger showing in credit trading where revenue was up 18 per cent, while its equities performance was flat compared with a year ago.

The bank also took a higher than expected £700 million charge for mis-selling payment protection insurance, in what is Britain’s costliest consumer banking scandal.

-Reuters