Barclays profits drop 25% in Q1

Barclays has reported a 25% drop pre-tax profit to £793m in Q1, down from £1.1bn in Q1 2015.

Related topics:  Finance News
Rozi Jones
27th April 2016
Barclays branch

The bank attributed the performance to poor Non-Core results, which saw a loss before tax of £815m.

Its Corporate and Investment arm saw a 31% drop in profits to £701m, driven by a reduction in Banking and Markets income, increased credit impairment charges and higher operating expenses.

However its core business saw an 18% profit rise year-on-year.

This morning, Barclays announced that it would accelerate the disposal of its Non-Core unit, including the sale of its French Retail Banking operations which involve a network of 74 branches, life insurance business, and wealth and investment management operations.  

James Staley, Group CEO, said:

“This quarter we have made good early progress against the strategy update we announced on the 1st of March. It is the first set of results as a transatlantic consumer, corporate and investment bank operating under our new configuration of Barclays UK and Barclays Corporate & International, and they show a Core business performing well in a challenging environment.

"The performance of our Corporate and Investment Bank was relatively resilient in a tough quarter, but there is more we must do to improve returns, and we are focused on management actions to do so. We continue to target cost reductions in the Group and we are on track to meet our 2016 guidance for the Core business of £12.8 billion, and our longer-term target of a Group cost to income ratio under 60%.

"The performance of the Core today shows the potential power of the Group once it is freed from the drag of Non-Core. We promised to accelerate the pace of progress in reducing Non-Core so that our Group performance converges with our Core performance within a reasonable time frame.

"Since the 1st of January, we have made progress in exiting from Investment Banking in nine countries, completed the sale of our Portuguese retail, wealth and SME banking businesses, and are progressing other announced sales, including the Italian branch network, the Index business and our Asian wealth business, towards completion in 2016. As these deals complete we are reducing RWAs and, crucially, eliminating costs which have a direct impact on our profitability today and mask the true performance of our strong Core business. This is the work we need to complete.”

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