UK banking giant Barclays posted a surge in annual profits for 2016 on higher investment banking revenues and a significant drop in litigation and conduct costs.
Although revenues for 2016 dropped by 3% to £21.5 billion, Barclays reported profit before tax of £3.23 billion for the year, nearly three times higher than the £1.1 billion it reported in pre-tax profits for fiscal 2015.
Litigation and conduct costs for the year dropped by 69 per cent to £1.4 billion, down from £4.4 billion the year before.
The bank’s core capital ratio, a measure of its financial health and strength, rose to 12.4% in 2016 from 11.4% in the previous year.
Progress in restructuring
James E. Staley, Group Chief Executive, said that Barclays made progress in reorganising its business into Barclays UK and Barclays International; renewing its commitment to operate a leading global corporate and investment bank; reducing its stake in Barclays Africa, over time, to a non-consolidated level; and accelerating the run down of the bank’s Non-Core assets.
“A year ago we laid out our intention to accelerate the restructuring of Barclays and refocus our business as a transatlantic, consumer, corporate and investment bank, anchored in London and New York. We have made strong progress against this agenda in 2016,” Staley said.
Barclays is currently in the process of selling its African business unit. The bank reduced its ownership of Barclays Africa with an initial sale of 12.2% in May, and in the fourth quarter the company agreed terms with local management and submitted to regulators its separation arrangements of its Africa business.
Staley said in a statement that the “non-core” unit would close on 30 June, essentially ending the restructuring of the bank.