Barclays boss dampens bid talk as profits hit record pounds 4.6bn
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.BARCLAYS UNVEILED a 20 per cent jump in profits to a record pounds 4.6bn on the back of a strong investment banking performance, prompting its chairman to brush off recent bid speculation for Britain's third-largest bank.
The results masked a flat performance at the UK retail bank, however, and analysts expressed doubts about the sustainability of growth at the debt-focused investment banking business, with fixed-income markets predicted to slow.
There was also disappointment at rising costs which outstripped revenue growth. Profits met analysts' expectations largely because cost increases were offset by a 19 per cent fall in bad-debt provisions to pounds 1.1bn, which Barclays predicted would rise again this year to about pounds 1.4bn.
Whereas investment banking earnings rose 25 per cent to pounds 1.04bn, helped by a 41 per cent jump in dealing profits, profits at the UK retail bank dropped 1 per cent to pounds 1.13bn due to weak mortgage lending.
John Varley, the chief executive, said: "I don't like to see a flat performance in a business as large as this, and we'll be focusing a lot of attention on this." He said Barclays was trying to turn its retail bank around by hiring more staff, refurbishing branches and upgrading technology. That, together with the hiring of about 2,000 people for Barclays Capital, the investment banking arm, pushed up annual costs by 15 per cent to pounds 8.4bn. Hiring is set to continue.
James Leal, at Teather & Greenwood, said: "The figures rekindle the debate about whether the bank's investment programmes, which are pushing cost growth higher than income growth, will pay back."
Mr Varley gave a cautious outlook for this year, predicting slower growth in America and China and an easing in UK household spending as a result of five interest rate rises.
Faced with the consumer slowdown and fierce competition in UK retail banking, Barclays is pushing overseas. Mr Varley said talks with regulators in South Africa about the planned bid for the country's largest consumer bank, Absa, were progressing well.
Barclays recently acquired the Spanish bank Zaragozano and offered to buy ING Group's French money management divisions. Matt Barrett, Barclays' chairman, said he expected to see consolidation in "massively over-banked" Europe, with Barclays "at the forefront". He played down speculation that Barclays could be taken over by a US rival. "Never say never, but our strategy is that we will control our own destiny," he said.
Barclays shares closed down 0.5p at 593.5p.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments