Barclays H1 Pretax Profit Climbs, Stock Up

(RTTNews) - Shares of Barclays plc (BARC.L, BCS) were gaining around 2 percent in London trading after the British lender reported Wednesday significant growth in its first half profit with strong performance in investment bank segment, as well as lower expenses. The company also maintained its dividend.

The first-half pretax profit increased 25 percent to 3.11 billion pounds from 2.50 billion pounds in the prior-year period. Attributable profit was 1.61 billion pounds, up 43 percent from 1.13 billion pounds in the year-ago quarter. Earnings per share grew to 9.7 pence from last year's 7.0 pence.

The latest results included net loss in adjusting items of 615 million pounds, compared to 848 million pounds. Additional provisions of 800 million pounds for ongoing investigations and litigation primarily relating to Foreign Exchange, additional UK customer redress provisions of 1.03 billion pounds, and loss on sale of Spanish business of 118 million pounds were partly offset by gain on US Lehman acquisition assets, and others.

Adjusted profit before tax, which excluded certain items, was 3.73 billion pounds, compared to last year's 3.35 billion pounds, reflecting improvements across all core operating businesses. Adjusted basic earnings per share were 13.1 pence, compared to 10.9 pence last year.

Barclays core business' pre-tax profit grew 10 percent with improvements of 36 percent in the Investment Bank, 12 percent in Africa Banking, and 4 percent each in Personal and Corporate Banking and in Barclaycard. Meanwhile, non-core business recorded wider loss.

Total income net of insurance claims were 13.89 billion pounds, up 4 percent from 13.38 billion pounds last year. Net operating income grew 5 percent to 12.92 billion pounds.

On an adjusted basis, total income declined 3 percent to 12.98 billion pounds and net operating income fell 2 percent to 12 billion pounds, reflecting weak results in non-Core business.

Net interest income grew to 6.20 billion pounds from 6.08 billion pounds last year. Total income was 14.14 billion pounds, up from 13.62 billion pounds a year ago.

Net tangible asset value per share decreased as profit generated was more than offset by dividend distributions and the impact of changes in major forward interest rates and currency movements on reserves, the company said.

The lender also reported a 7 percent reduction in total adjusted operating expenses, driven by savings from strategic cost programmes. Impairment reduced 10 percent to 973 million pounds.

Further, the Board has concluded that it is appropriate to plan for a 6.5 pence dividend for 2015, the same level as 2014. The company said a second interim dividend of 1 pence will be paid on September 14, 2015.

Executive Chairman said, "A sensibly planned faster run-down of Barclays Non-Core will be implemented, resulting in it having around £20bn of RWAs in 2017 when we expect to reintegrate it into the Core."

In London, Barclays shares were trading at 284.50 pence, up 1.75 percent.