Barclays’ share cheer lifts London market into black

SHARES in Barclays raced ahead on Friday as boss Jes Staley said he is confident the bank is on the right track regardless of the Brexit vote.

The banking giant was the biggest riser on the London market despite pre-tax profits tumbling 21 per cent to £2.06bn in the first half of the year.

Shares in the lender rose more than 5 per cent, or 8.1p, to 154.6p, helping the London market step up 3.37 points to stand at 6724.43.

Mr Staley said the picture in the second quarter was “strong” and showed “very encouraging progress” against the lender’s existing strategy.

He added: “We remain confident that it is the right plan for Barclays, and see no reason to adjust it, or the pace of delivery, in light of the vote by the UK last month to exit the EU.”

However, the bank was also quick to point out where the Brexit vote could harm business.

It said that the increased risk of recession with lower growth, higher unemployment and falling UK house prices “would likely negatively impact a number of Barclays’ portfolios”, most notably its mortgage offering.

It added that if Brexit negotiations end with the UK’s financial sector losing “passporting” rights, it would require the bank to make “alternative licensing arrangements in EU jurisdictions” where it operates.

Shares in Lloyds Banking Group were also ahead, rising 0.7p to 53.2p, while Royal Bank of Scotland climbed 4.4p to 192.4p.

On the currency markets, the pound surged 0.7 per cent against the dollar at 1.326 US dollars after the American economy churned out a lacklustre performance in the second quarter.

The US Department of Commerce said gross domestic product (GDP) came in at a lower-than-expected rise of 1.2 per cent in the three months to June, with market analysts having pencilled in growth of 2.6 per cent.

Sterling was 0.1 per cent down against the euro at 1.186 euro.

Across Europe, Germany’s Dax was up 0.6 per cent and the Cac 40 in France rose 0.4 per cent.

In stocks, drinks giant SABMiller rose 2 per cent or 90p to 4414p after its board backed an improved takeover offer from Budweiser brewer AnheuserBusch InBev.

The board has recommended shareholders accept an offer of £45 a share, up from its earlier offer of £44, valuing SABMiller at about £79bn.

The announcement comes after AB InBev cleared another major hurdle in its pursuit of the drinks firm after winning regulatory backing in China.

British Airways-owner International Consolidated Airlines Group was in the red after the group said it was poised to cut capacity and review investments.

Chief executive Willie Walsh commented: “Our performance this quarter saw a negative currency impact of 148m euro (£124.4m), primarily due to the weak pound.

“Numerous external factors affected our airlines, including the impact of terrorism, uncertainty around the UK’s EU referendum and Spain’s political situation.” Shares were off 3.3p to 406p. Away from the top tier, Foxtons saw its shares nosedive after profits tumbled 42 per cent in the first half of the year as the impact of Britain’s decision to quit the European Union hit the London property market.

Shares dropped more than 11 per cent, or 14p, to 110p as the estate agent said pre-tax profits slumped from £18.1m to £10.5m during the period.

The biggest risers on the FTSE 100 Index were Barclays up 8.1p to 154.6p, Standard Life up 10.7p to 302.9p and Paddy Power Betfair up 305p to 8800p.