Barclays set to thrive in Brexiteers’ Britain
BARCLAYS declared itself “open for business” and well-positioned to oil the wheels of UK economic growth as new chief executive Jes Staley hailed progress in shrinking the bank to boost its financial strength.
The American banker, who took over last December, is pressing ahead with a restructuring that will see Barclays focus on the UK and US and withdraw from Africa. Half-year profit from its core business jumped 19 per cent to £3.97 billion, but group pre-tax profit was dragged 21 per cent lower to £2.06billion as losses on the assets it is looking to sell increased to £1.9 billion.
Barclays also made a further £400million for payment protection insurance, taking its total PPI bill to £7.8 billion.
Staley said the Brexit vote would have no effect on its plans to close its noncore businesses in 2017, whose costs it expects to fall to £400-500million next year compared with about £1.6billion this year.
He said: “We are realistic about the potential effects of the vote on the UK economy but we are not unduly pessimistic about them.
“Barclays is very much open for business. We are not seeing ay signs of credit stress, which would be a typical harbinger of an economic slowdown.” Its lending to small and medium-sized businesses is “holding up quite well”, while £2 billion of residential mortgages have been completed since the vote, up 8 per cent on last year.
Staley played down the likelihood of moving large numbers of jobs away from London to maintain its access to Europe. Despite a sharp slowdown in transactions in branches and a surge in customer use of mobile banking – Barclays does 30,000 video encrypted calls a week – Staley said Barclays remained “very sensitive to the social price” of closing when it has the last branch in a small town. Barclays has about 1,300 branches after closing 100 last year, but has no target for shrinking further.
Its shares rose 8p to 154½p.