Barclays to restructure business after reporting drop in profits

Barclays has reported a fall in profits while announcing its first annual results under new chief executive Jes Staley, which ended in December 2015.

The bank’s underlying pre-tax profits for the past 12 months dropped by 2% to £5.4bn.

Barclays also announced an 8% fall in annual profits to £2.1bn, which was directly affected after the bank’s £1.45bn provision for payment protection insurance (PPI) mis-selling in 2015’s last quarter.

Barclay’s bonus staff reduced by 10% to £1.67bn in 2015, and the loss of £261m in Q4 resulted in the sale of the Italian retail banking branch network, which is due to complete in Q216. Total losses on sale relating to the Spanish, Portuguese and Italian businesses in 2015 were £580m (2014: £446m).

However, Barclays did see a 3% in core profits after Barclaycard performed particularly well, especially in the US, and steady income from its investment banking arm.

Going forward, Barclays will restructure its business by focusing on on two main core divisions - Barclays UK and Barclays Corporate & International. To do this, the bank plans to sell its 62.3% stake in its Africa business over the coming years.

Jes Staley, Barclays’ chief executive officer, said: “Our 2015 performance demonstrates the strength of Barclays’ Core business, as well as the importance of continuing to make progress in running down Non-Core and controlling our costs to deliver the returns our shareholders deserve in a reasonable timeframe.

“The Investment Bank year on year performance was stronger as the benefits of the strategy implemented since May 2014 were realised.

“What all of this illustrates is that Barclays is fundamentally on the right path, and is, at its core, a very good business. There is of course more we need to do and areas where I believe we can move much faster to deliver the high performing Group that Barclays can and should be. 2016 will consequently be a year of accelerated delivery from a good base.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →