Barclays unveils fall in profits

Barclays was forced to reveal its operating profits a day early yesterday after the key numbers for the banking giant leaked out.

Barclays is said to be planning several hundred job cuts in its investment banking arm. Picture: Getty

It released a stock market report confirming a newspaper story that underlying operating profits fell from £7 billion in the previous year to £5.2bn, although pre-tax profits jumped from £246 million to £2.9bn. The bank had been due to announce the full details of its 2013 results at 7am today.

The premature release of the details followed a newspaper report forecasting a slight drop in income to £27.9bn, adding that the sharp rise in statutory profit at Barclays reflected lower charges on the value of its own debt. The underlying profit figure is slightly below the consensus City forecast of £5.4bn.

Falling operating profits came in a year in which Barclays put aside a further £2bn for customer mis-selling scandals including payment protection insurance (PPI). The bank was also forced to tap investors for £5.8bn in a rights issue after discovering a £12.8bn shortfall in its finances.

Chief executive Antony Jenkins will give an update today on his already-announced programme to overhaul the bank’s culture and practices.

That followed his review of the group after a £290m Libor-rigging fine that saw his predecessor and former boss, Bob Diamond, ousted.

Barclays is said to be planning several hundred job cuts in its investment banking arm, as well as banning all inessential overseas staff travel to slash costs.

Jenkins is expected to be quizzed about both issues this morning, having previously issued holding statements about on-going restructuring without giving details.

There is also potential for a further political and consumer fallout as the bank is expected to confirm that its bonus pool will hit £2.5bn for 2013 – despite the fall in profits and a recent row over missing consumer data.

Barclays is the third of the UK’s big five banks to pre-release information ahead of their official full-year results.

But taxpayer-backed Royal Bank of Scotland and Lloyds Banking Group were not forced into the action by embarrassing leaks. Lloyds reports later this week and RBS next week.

Andrew Bailey, chief executive of the Prudential Regulation Authority, which monitors the financial health of banks and insurers, may well face questioning on the Barclays bonus issue today by Westminster MPs.

Bailey, who is also deputy governor of the Bank of England, is at a meeting of the Treasury select committee to answer questions about the failed sale of Lloyds bank branches to Co-op Bank, known as Project Verde.

But MPs frequently use the ­appearances of senior regulators at the committee to roam widely over contentious financial ­subjects.

Sir Richard Lambert, former director-general of the CBI employers’ lobby group, is to publish his initial findings on a new banking regulator today as part of his Banking Standards Review.