Thursday 1 August 2019 7:28 am

Barclays boosts first-half profit 82 per cent to £3bn

Barclays today posted first-half profit before tax of £3bn, an 82 per cent increase on the same period last year.

Total income fell one per cent to £10.8bn.

Return on tangible equity was 9.4 per cent, down from 11.6 per cent in the first half of 2018.

The bank said it was targeting return of tangible equity of more than nine per cent in 2019 and ten per cent in 2020.

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Operating expenses increased one per cent to £6.8bn, which the bank said reflected continued investment in the business.

Barclays said cost control “is a priority,” and said: “given the challenging income environment experienced in the first half, management expects to reduce 2019 costs below £13.6bn”.

Barclays UK income decreased two per cent which it said was due to margin compression and its reduced risk appetite in UK cards.

Chief executive Jes Staley said: “This was another resilient quarter of performance.

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“For the second quarter in succession Barclays generated an attributable profit of over £1bn, and delivered EPS [earnings per share] of 12.6p for the first half of 2019.

“Our group return on tangible equity of 9.3 per cent for the quarter is a further step towards meeting our 2019 RoTE target of greater than nine per cent.”

Barclays said its remaining payment protection insurance mis-selling provision is £400m, but warned that “the uncertainty associated with future claims levels has increased ahead of the Financial Conduct Authority (FCA) complaints deadline on 29 August 2019”.

The bank announced a dividend for the first-half of 3p per share, up from 2.5p per share at the same time last year.

Michael Hewson, chief market analyst at CMC Markets UK, said: “After a difficult first quarter, when profits came in below the level a year before, the second quarter appears to have been a much better quarter for Barclays.

“This would appear to be a welcome boost for CEO Jes Staley whose strategy for turning the bank around has come under fire from activist shareholder Edward Bramson, of Sherborne Capital who earlier this year failed with an attempt to gain a seat on the board and who wants management to divest the underperforming investment bank.

“At the end of the first quarter there were a number of questions about how Jes Staley’s plan for the bank was playing out. After a better performance in the second quarter these voices may start to get a little bit quieter, with the bank broadly meeting expectations in this quarter.”

Barclays share price rose by just over half a per cent to 155p this morning.