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Barclays shares drop 5% after profits disappoint | |
(35 minutes later) | |
Shares in Barclays fell by 5% after its third-quarter profits figures came in below analysts' expectations. | |
Profits for the period were up by 31% to £1.1bn, giving the bank a profit for the nine months so far of £3.4bn. | |
But its investment banking profits were down from £1bn to £652m, in what the bank said had been a difficult quarter for its markets business. | |
Barclays boss Jes Staley is currently being investigated over claims he tried to uncover the name of a whistleblower. | Barclays boss Jes Staley is currently being investigated over claims he tried to uncover the name of a whistleblower. |
The whistleblower wrote a letter that raised questions about the decision to employ one of Mr Staley's old colleagues from his JP Morgan days. | The whistleblower wrote a letter that raised questions about the decision to employ one of Mr Staley's old colleagues from his JP Morgan days. |
Barclays has already reprimanded Mr Staley for his conduct, but the matter is still being investigated by financial regulators the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). | Barclays has already reprimanded Mr Staley for his conduct, but the matter is still being investigated by financial regulators the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). |
Muted activity | |
Mr Staley is in charge of the UK's only remaining major international investment bank. | Mr Staley is in charge of the UK's only remaining major international investment bank. |
Weak profits in investment banking are widespread, as activity in bond markets is muted against a background of abnormally low interest rates, which make it difficult for banks to slice off profits. | |
Barclays, however, said profits growth had been driven by a £932m reduction in operating expenses and its performance had been encouraging. | |
Its UK banking division saw an improvement in profitability and what it said was a "good underlying return" from its consumer, cards and payments business. | |
Blight | Blight |
Mr Staley said these results were important as they were the first for many years in which "we have not been in some state of restructuring". | |
They were also helped by an absence of further provision for payment protection insurance (PPI) mis-selling. | They were also helped by an absence of further provision for payment protection insurance (PPI) mis-selling. |
In the first six months of the year, the bank set aside £700m. Its total provisions for PPI stand at £9.1bn. | In the first six months of the year, the bank set aside £700m. Its total provisions for PPI stand at £9.1bn. |
That could spell the end of the PPI scandal that has blighted UK banks' reputation and results. | That could spell the end of the PPI scandal that has blighted UK banks' reputation and results. |
The bank also confirmed it was setting up a separate UK banking division to keep its day-to-day banking operations apart from the riskier investment banking, as required by new rules brought in to stop a repeat of last decade's credit crisis. | The bank also confirmed it was setting up a separate UK banking division to keep its day-to-day banking operations apart from the riskier investment banking, as required by new rules brought in to stop a repeat of last decade's credit crisis. |