Barclays rebounds into profit in 2018

LONDON (AFP) – Barclays rebounded sharply into profit in 2018, as a vast hit from the previous year on the sale of its African business was not repeated, the British bank announced yesterday.

The lender’s performance came despite vast litigation costs and a new charge on the impact of mounting economic uncertainty over Brexit.

Net profit, or earnings after tax, reached GBP1.4 billion (USD1.8 billion, 1.6 billion euros) last year, Barclays said in a results statement.

That contrasted with a large loss of GBP1.9 billion in 2017, when it had taken a vast GBP2.5-billion hit on the sale of Barclays Africa Group Limited.

The lender nevertheless faced litigation and conduct charges in 2018 of GBP2.2 billion.

That was in large part due to a GBP1.4-billion US fine over its conduct in the run-up to the global financial crisis.

It also included another GBP400 million in costs for payment protection insurance (PPI) mis-selling claims.

However, credit impairment charges sank 37 per cent to £1.5 billion.

Turning to Brexit, Barclays revealed it took a GBP150-million charge in the fourth quarter on “the impact of the anticipated economic uncertainty in the UK”, as the nation prepares to leave the European Union next month.

“2018 represented a very significant period for Barclays,” said Chief Executive James Staley.

“In the course of the year, having resolved major legacy issues and reduced the drag from low returning businesses, we started to see the earnings potential of the bank, as the strategy we have implemented began to deliver.

“This was evident in the improved performance across the group compared to 2017.”