Barclays profits almost treble as overhaul nears end

Barclays has sold off unwanted businesses to focus on its UK and US operations. Picture: Leon Neal/AFP/Getty Images
Barclays has sold off unwanted businesses to focus on its UK and US operations. Picture: Leon Neal/AFP/Getty Images
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Barclays boss Jes Staley said the bank is “just months away” from completing an overhaul as he unveiled a surge in annual profits.

The lender said bottom-line group profits nearly trebled to £3.23 billion, up from £1.15bn a year earlier, while it posted a 4 per cent rise in underlying pre-tax profits to £6.4bn for its core business – Barclays UK and Barclays International.

Staley, who has been selling down and offloading unwanted businesses to focus on its UK and US operations, said the group had “accomplished a lot in a year”.

He added: “We are now just months away from completing the restructuring of Barclays, and I am more optimistic than ever for our prospects in 2017, and beyond.”

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Profits for the year were helped by a revenue boost from its investment banking operations, which saw income lift 6 per cent to £10.5bn thanks to buoyant bond trading and foreign exchange rates.

It also saw lower costs for payment protection insurance (PPI) compensation, at £1bn in 2016 against £2.8bn the previous year.

The group said it planned to close its so-called non-core bank on 30 June, six months earlier than expected.

Staley has been leading a widespread restructuring for the past year, offloading businesses from France to Egypt and moving to sell off its 62 per cent stake in Barclays Africa.

Chairman John McFarlane said it was a “pivotal year” for the bank.

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In its annual report published alongside the results, the bank revealed Staley was awarded a £4.23 million pay package for 2016. The bank’s total bonus pool edged down to £1.53bn, from £1.54bn in 2015.

Staley’s pay included a £1.2m salary, £1.32m in annual bonus and £1.15m in role-based pay, which was introduced to sidestep the EU bonus cap. The bank said he was also awarded a potential £2.82m of deferred shares under a long-term incentive plan.

Shares in the bank rose in early trading as investors cheered the improved annual performance and as it nears the end of its mammoth overhaul.

Staley said that, on a bottom-line basis, it was the “first year in the last four that the bank has actually earned money”.

The group said it would “lighten” a hiring freeze put in place last year, which saw the workforce reduce by 15,000.

Staley reiterated that the group had no plans to move staff to Europe as a result of Brexit and said it would be able to use its bases in Germany and Ireland as subsidiaries once the UK pulls out of the EU.

Results showed its investment bank was a star performer, with profits rising 14 per cent to £2.65bn.

Its Barclays UK retail bank also performed well as it was helped by sharply lower PPI costs, with pre-tax profits rising to £1.74bn. The group said loans to UK customers remained stable at £166.4bn.

Staley said the UK economy was proving resilient to Brexit uncertainty so far and echoed comments from UK banking that he believes London will “remain the financial centre that it is today”.

On the possibility of rising interest rates in the US, he said it would be “very good for the banks” and added that he had “a lot of confidence in the Bank of England” to set rates depending on economic performance on this side of the Atlantic.

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