British lender Barclays Plc (BCS,BARC.L) Wednesday reported a sharp increase in first-half profit, while adjusted profit declined by currency movements and a fall in Investment Bank income.
Antony Jenkins, Group chief executive said, "Performance in the Investment Bank was impacted by the repositioning underway as well as difficult trading conditions in the quarter, but it is where we expected it to be at this point."
In early May, the UK lender announced that it plans about 7,000 headcount reductions at its Investment bank by 2016, as the company is in a move to reduce cost and achieve higher returns, and growth.
For the first half, the company posted profit before tax of 2.50 billion pounds, significantly higher than 1.68 billion pounds in the previous year.
Profit before tax for the period reflected an additional provisions for Payment Protection Insurance, or PPI redress of 900 million pounds, compared to 1.35 billion pounds last year, and non-recurrence of a provision for interest rate hedging products redress, which totaled 650 million pounds last year.
Adjusted pre-tax profit fell 7 percent to 3.35 billion pounds, mainly driven by currency movements and a reduction in the Investment Bank profitability, partially offset by improvements in Personal and Corporate Banking, Barclaycard, and Barclays Non-Core.
Profits before tax in Personal & Corporate Banking and Barclaycard were up 23 and 24 percent, respectively. Meanwhile. Africa Banking pre-tax profit declined 12 percent, and Investment Bank showed a profit fall of 46 percent.
Profit to ordinary equity holders of the parent increased to 1.13 billion pounds from 671 million pounds, and earnings per share rose to 7 pence from 4.8 pence per share a year earlier. Adjusted attributable profit was 1.76 billion pounds, compared to 2.06 billion pounds in the prior year.
Total income was 13.62 billion pounds, down from 15.43 billion pounds last year.
Net interest income increased to 6.08 billion pounds from 5.58 billion pounds in the same period last year. Net fee and commission income was 4.26 billion pounds, lower than 4.40 billion pounds a year earlier.
Net trading income fell to 2.58 billion pounds from 4.57 billion pounds in the preceding year.
Adjusted operating expenses declined 9 percent to 8.88 billion pounds, reflecting improvements across each of the businesses as a result of Transform initiatives and currency movements, the firm said.
Fully loaded common equity tier 1 ratio was 9.9 percent, compared to 9.1 percent at the end of December 2013.
Looking forward, the Group said 2014 will be a transition year as it continues to make investments and focus on balance sheet optimization and cost reduction.
Barclays also said it will pay a second interim dividend of 1.0 pence on September 19, to shareholders of record on August 8, 2014.
BARC.L is currently trading at 227.20 pence, up 8.10 pence or 3.70 percent, on a volume of 57.76 million shares.
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