Barclays ‘100% prepared’ for hard Brexit but profits slip

The chief executive of Barclays said the bank is “100% prepared” for a hard Brexit, expanding its Irish subsidiary to become its main European hub outside London.

Barclays, which employs almost 50,000 staff in the UK, has increased its operations in Dublin by 150-200 jobs to make Ireland its base for continuing to trade within the European Union.

“At Barclays we are well on our way to being prepared for a hard Brexit,” said Jes Staley, speaking to Bloomberg TV as the bank reported third-quarter results yesterday. “We have increased the size of the bank’s subsidiary in Ireland. We have filed all the necessary applications to relicence our branches. We are fully prepared to be 100% operational in case of a hard Brexit.”

Staley said that Dublin was a “logical location” for its EU base because the licences and ownership of its banks across the conti- nent could be moved to the existing subsidiary, Bank Ireland. He added that the headcount increase in Dublin would be a combination of new hires and those from the UK business interested in relocating to Ireland.

The bank said it has allocated a proportion of its £13.9bn annual expenses budget to run the expanded Irish business but would not give a specific figure for the cost of Brexit to Barclays.

Staley, who earlier this year was ordered to hand over more than £1.1m out of his own pocket for attempting to unmask a whistleblower, said that while hard-Brexit contingency plans are ready to be triggered, the bank would like to see the UK government negotiate a deal with Europe.

“We have been prudent,” he said. “We are pretty well positioned for a hard Brexit. However, like everyone else we would like to see a negotiated Brexit that will not harm the economy in the UK.”

Without a free trade deal between the UK and EU to preserve mutual market access for financial services, banks will lose their “passport” that gives them the right to trade securities across Europe from London.

Staley’s comments came as the banking group reported pre-tax profits of £1.5bn in the third quar- ter, down from £1.9bn in the second quarter. However, profits were up on the £1.1bn reported in the third quarter in 2017.

Barclays UK made a £740m pretax profit, up from £656m in the previous quarter and £661m in the same period last year.

However, the banking group reported a slide in pre-tax profits to £3.1bn for the nine months to the end of September. The bank, which reported a £3.4bn profit in the same quarter last year, blamed litigation and conduct charges related to a £1.4bn settlement with the US Department of Justice over mis-selling financial products before 2008 in the run-up to the financial crisis.

It also reported a £400m additional charge for payment protection insurance claims in the first quarter. The banking group said that stripping out one-off charges, pre-tax profits increased by 23% to £5.3bn for the first nine months of the year.