Barclays hit by big losses after major restructuring

BARCLAYS has signalled the end of a group-wide restructure, but fell to a half-year loss after booking extra compensation costs and a £2.5bn hit from the sale of its Africa arm.

The sell-down of Barclays Africa Group (BAGL) drove the lender to an attributable loss of £1.2bn over the six-month period, down from a £1.1bn profit the year before.

Barclays, which has been shedding hinterland businesses to focus on core UK and US operations, suffered a £1.4bn loss on the sale of 33.7% of BAGL as well as a £1.1bn charge linked to the disposal.

It came as the bank set aside another £700m to meet compensation claims for mis-selling payment protection insurance (PPI), bringing its total PPI bill to £9.1bn.

However, group pre-tax profits jumped 13% to £2.34bn.

The second quarter marked a milestone for Barclays as it completed “two critically important planks” of its strategy to offload unwanted businesses.

The banking giant said it had driven down its majority shareholding in BAGL to the extent where it can now apply for regulatory deconsolidation. Barclays expects to complete this process next year, but plans to maintain a smaller 15% stake in the business.

It has also run down its non-core unit ahead of schedule to below £25bn in risk-weighted assets, meaning it could close the operation six months early.

Total income slipped 1% to £10.9bn, with shares dropping just shy of 1% in early afternoon trading on the London Stock Exchange.

The lender’s investment bank saw pre-tax profit rise 7% to £1.7bn, with an 18% jump in credit trading offsetting a 5% drop in the markets operation.