Barclays expecting small fall in quarterly profits

Thursday 24 April 2014 15.13
Barclays chief executive Antony Jenkins set to announce more job cuts at the bank?
Barclays chief executive Antony Jenkins set to announce more job cuts at the bank?

Barclays, struggling to restore its damaged image, said today it expected to announce a small drop in quarterly pre-tax profits when it formally updates the market next month. 

In a statement delivered at its annual general meeting, Barclays said that its investment banking business had one more suffered during the first three months of 2014.

Barclays first-quarter update comes two months after the bank said it would axe thousands of jobs and raise bonuses for its bankers despite its investment arm falling into a heavy loss in 2013.

"We have seen the benefits of being a diversified bank in the first quarter with the businesses outside the Investment Bank delivering a resilient performance, compared to the same period last year," Barclays chief executive Antony Jenkins said in today's statement.

He added that the first-quarter showing "is expected to result in a small reduction in adjusted profit before tax".

Barclays will publish full first-quarter earnings on May 6, two days before it unveils a strategy update, that according to reports could contain further job cuts.

"I hope that you will understand that it is very difficult for me to say more until we finalise our conclusions and announce them on May 8th," Jenkins said in his statement to shareholders.

"But I do want to be very clear now on one aspect of our thinking: The future for Barclays will be as a strong, focussed, international bank.  And the investment bank will be an important part of that mix. A strong investment bank in Barclays is good for the business, good for shareholders, and good for Britain," he added.

Jenkins, who recently declined a huge bonus with Barclays being probed along with other banks over possible manipulation of foreign exchange trading, has already said that between 10,000 and 12,000 jobs would go worldwide this year.

Jenkins said in February that about 7,000 jobs would go in Britain, out of a global workforce of about 139,000.

The bank, which is seeking to repair a reputation badly damaged by its role in the Libor interest rate-rigging scandal of 2012, recently increased the money available for staff bonuses by almost 10%, angering politicians and unions. 

Along with other British lenders, Barclays has been hit also by massive compensation payouts to customers who were mis-sold insurance policies.

And last year, Barclays was forced into a huge 5.8-billion shares sale, or rights issue, to meet regulatory demands to strengthen its capital buffers.