Barclays reports a 24% drop in half-year profits to £3.7 billion
The banking giant’s profits for the six months to June 30 fell by more than expected – down from £4.9 billion a year ago – after it revealed a £1.5 billion estimated cost impact from the debacle in its structured products division.
Barclays also said it put aside £165 million for a potential fine for the error, which saw it sell more structured notes than it was allowed to under US rules, and is being scrutinised by regulators.
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Hide AdThe group said that, net of tax, the bottom-line charge relating to the US trading saga stood at £581 million, of which £341 million was taken in the second quarter.
The lender also revealed it put by £341 million for potential loan losses as the economic outlook has weakened due to soaring inflation.
Barclays chief executive CS Venkatakrishnan said: “We are alert to the pressure that the rising cost of living will have on our customers and colleagues.
“We have a range of measures in place to help and are looking to do more.
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Hide Ad“With our resilient income growth and balance sheet strength, we can provide that support while distributing excess capital, having announced a half-year dividend of 2.25p per share and an intention to initiate a further share buyback of £500 million.”
The group warned that its annual costs are set to rise to around £16.7 billion, up from previous guidance for £15 billion, as a result of the US structured notes error and a weaker pound against the US dollar.
But, in spite of the charges, Barclays said it will pay out a dividend of 2.5p per share and launch a buyback of £500 million.