Barclays has reported a first half attributable loss of over £1bn, which it blamed on the hefty hit it took from the sale of its African business.
In the six months to the end of June, the FTSE 100-listed lender reported an attributable loss of £1.2bn, compared with a profit of £1.1bn in the corresponding period 12 months ago.
The company attributed the loss to the £2.5bn hit it took from the sale of a 33% stake in Barclays Africa Group in June, which cut its holdings in the business to below 15% and ended its spell as a major player on the continent after 90 years.
While the sale of the Africa unit boosted the bank’s core capital ratio from 12.5% in March to 13.1%, Barclays recorded a £1.4bn loss on the sale and a further £1.1bn impairment charge.
“The restructuring is complete, our capital ratio is within our end-state target range, and while we are also working to put conduct issues behind us, we can now focus on what matters most to our shareholders: improving group returns,” said group chief executive Jes Staley.
Profits before tax rose from £2bn to £2.3bn but fell short of analysts’ expectations for a figure in the £2.7bn region, while an extra £700m was being set aside to compensate customers for mis-sold payment protection insurance.
“This £700m Barclays has set aside for PPI, added to the £1bn set aside by Lloyds Banking Group, reflects the fact that the clouds are gathering for a perfect storm of PPI claims over the next two years,” said industry experts at customer communications firm GMC Software.
Last month, the Serious Fraud Office (SFO) charged Barclays and four former executives with conspiracy to commit fraud relating to the lender’s dealings with Qatar during its £11.8bn fundraising in the financial crisis.
The UK’s top prosecution service brought charges against the lender as well as its former chief executive John Varley. It also charged senior executives at the time Roger Jenkins, Thomas Kalaris and Richard Boath. The maximum penalty for the executives is 10 years in prison. A fine would be determined for the bank.
The SFO said the charges related to Barclays “capital raising arrangements” in Qatar“which took place in June and October 2008, and a $3bn loan facility made available to the State of Qatar acting through the Ministry of Economy and Finance in November 2008.”
The deals came when the markets were boiling in the white heat of the 2008 financial crisis – Lehman Brothers had just crashed – but Varley and his team tapped investors from the royal family of Qatar for $6.1bn in two fundraisings that year. – IBTimes