Antony Jenkins ready to back BarCap

By MARTIN FLANAGAN
Published on 10/02/2013 00:00

BARCLAYS boss Antony Jenkins will pledge his backing for the embattled group’s investment bank this week alongside annual results showing the division’s resilient trading against severe headwinds in 2012.

Some in the City had expected Jenkins, a Barclays veteran whose background is rooted in retail banking, to brutally prune BarCap amid controversies such as Libor fixing.

But in a strategic review to be unveiled with the latest results on Tuesday, Jenkins is expected instead to highlight the strong profits contribution of BarCap as evidence for its importance to the parent.

Simon Willis, banking analyst at Daniel Stewart, said: “Last year was tough for investment banking in many ways. The ongoing problems in the Eurozone put a lot of securities activity on hold, particularly in the early part of 2012.

“There was also something of a freezing up of M&A [takeovers] activity. But the final-quarter results from the US bulge bracket investment banks were better and the atmosphere has improved in the first quarter of 2013.

“BarCap, like its peers, should also benefit in 2013 from weaker comparatives with 2012.”

Shore Capital forecast that Barclays’ investment bank will have boosted its annual profit to £4.05 billion from £2.96bn in 2011. Shore reckons the underlying pre-tax profit will be £7.22bn, up from £5.59bn.

Exceptional charges, including £1.6bn of extra Payment Protection Insurance (PPI) redress costs and £850 million for mis-selling of interest rate hedging products to small businesses, will push the statutory pre-tax profit down to £983m from £5.9bn, Shore added.