Barclays Plc: Bank reveals restructuring plan, to exit Africa as profits fall

0

Laith Khalaf, senior analyst at Hargreaves Lansdown stockbrokers, said: “Cleaning is very much still in progress at Barclays, as the group seeks to focus its business around its core strengths and mop up the grisly legacy bits that are still weighing the bank down”. It is not yet clear how the changes will affect in any way the bank’s over 12 million customers in the continent and over 42,000 employees.

“Investment banking income for January and February was roughly in line with this time last year, although March last year was a particularly strong month and we don’t expect almost as strong a month (this year)”, Tushar Morzaria, finance director, told reporters on a conference call.

BARCLAYS operations in Africa can not shut even if its parent company decides to exit from the continent, says Barclays Africa Group chief executive officer Maria Ramos.

The currency struggles, plus what the company describes as risks of corruption on the continent, has led the new chief executive Jes Stanley to conclude that, despite the continent being a growth area for the company, the African business is a “costly distraction”.

This included £976 million in bonuses across its investment banking business, down from £1 billion in 2014.

Barclays is fundamentally on the right path, and is, at its core, a very good business”.

“Consequently any decisions concerning the operations of Barclays Kenya can only be made by Barclays Africa Group in consultation with other investors who are shareholders in this business”.

Speaking via a conference call from Johannesburg during the announcement of the bank’s financial results yesterday, Ramos said the strategy of Barclays in Africa was hatched in 2013 through combining Absa Group Limited and Barclays’ African operations.

In a sign that Barclays remains mired in problems, the British lender announced that net losses had more than doubled past year.

It means the bank set aside a total of £2.2bn for PPI last year, up from £1.27bn the year before and comes after a slower-than-expected decline in complaints over the affair in the second half of 2015.

Staley also revealed a new structure to meet new United Kingdom rules.

Of Barclays’s four divisions, only Barclaycard and personal and corporate banking have consistent returns of more than 10%. Adjusted pretax profit, including restructuring costs, fell 56% to 247-million pounds in the quarter from 563-million pounds in the year-earlier period, according to the filing.

Barclays has reported a fall in annual profits as it announced a group-wide shake-up and took a further hit for payment protection insurance (PPI) mis-selling. The bank’s shares tumbled 10% to 155 pence.

“In summary then, the future is bright”, said Staley.

Barclays to sell its stake on BarclaysAfrica

NO COMMENTS

LEAVE A REPLY