Barclays' share price falls as it reports a 10 per cent slide in adjusted pre-tax profits for the third quarter

 
James Nickerson
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Investors will be looking at how Staley is going to run the bank as much as the numbers (Source: Getty)

Barclays reported adjusted pre-tax profits to have fallen, missing expectations. Barclays' share price fell 3.34 per cent in early morning trading on the news.

The figures

Barclays reported a 10 per cent fall in adjusted pre-tax profit to £1.43bn for the third quarter, from £1.85bn last quarter and £1.59bn for the same period a year ago. Reported adjusted pre-tax profit missed analysts' expectations.

Statutory profit before tax also fell to £861m, down from £1.77bn in the second quarter, and the £1.22bn reported for the same period last year.

Revenues fell to £6.1bn from £6.4bn in the three month period.

A third interim dividend for 2015 of 1p will be paid on 11 December 2015.

The bank also reported four per cent growth in adjusted profit before tax to £5.16bn in the nine months to September 2015.

Meanwhile, in the first nine months of the year the bank reported a five per cent reduction in the group's total adjusted operating expenses to £12.47bn, driven by "strategic cost programmes".

Why it's interesting

The bank has been facing questions of late over its profitability and strategy, so the results highlight the scale of the challenge that its new chief executive Jes Staley will face.

Read more: Who is Jes Staley and what are his top priorities at Barclays?

While retail banking operations had been healthy, the investment banking operations had suffered in the previous quarter. Banks in the US reported earlier this month, showing weak bond revenues due to volatility in China and low commodity prices, with Barclays no exception.

Profit rose 11 per cent to £317m in the investment bank from £284m a year ago, but was down from £765m last quarter.

Read more: Three UK banks agree to £600m fine for forex rigging

Barclays reported third quarter adjusted pre-tax profit and statutory profit to have fallen and giving its outlook and guidance said "it is too early to make any specific comment on fourth quarter performance" with regard to the investment bank. It said the investment bank had faced weaker market conditions in October.

Staley sent a letter to staff this week to tell them that he planned "to complete the necessary transformation and repositioning of the investment bank to a less capital intensive model".

What Barclays said

Chairman of Barclays John McFarlane said:

Today’s results show another quarter of progress in our core businesses alongside the early effects of some of the changes that we are making.

We are pleased that Jes Staley will join us on 1 December as group chief executive officer, earlier than expected, and we are in the final stage of appointing a senior ondependent director and deputy chairman to replace Sir Mike Rake on his retirement from the Board in the near future.

As we align Barclays around our three priorities – focus on core (segments and markets), generating shareholder value, and instilling a high performance culture with strong ethical values - we now have a forward agenda that has been discussed and agreed with Mr. Staley. We will update the market on our plans for structural reform after we have agreed them with the regulator.

Now that we have a new CEO in place, we will provide further updates on future direction at the full year results.

In short

Barclays third quarter profits fell, missing estimates, as new chief executive Jes Staley is set to take over and chairman John McFarlane looks to accelerate cost cuts.

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