Barclay reveals profits dip, move to sell French unit
Troubled British bank Barclays posted sliding profits Wednesday, hit by losses in non-core assets flagged for disposal, adding it was in exclusive talks to sell its French retail division.
Earnings after taxation declined seven percent to £433 million ($630 million, 558 million euros) in the three months to March, Barclays said in a results statement. That compared with net profit of £465 million last time around.
Revenues slid 13 percent to £4.6 billion in the reporting period.
Pre-tax profits sank 25 percent to £793 million, hurt also by rising credit impairment charges and a poor performance by its investment banking arm. That undershot market expectations of £846 million.
The group meanwhile stressed its "cautious" outlook ahead of Britain's crucial referendum on European Union membership on June 23.
The bank added it has entered "exclusive discussions" with AnaCap Financial Partners over the possible sale of its French retail banking activities, in a move which would mark its exit from continental European retail banking.
No possible price tag was given for the French division, which employs around 1,000 people according to a company spokeswoman.
The talks are part of Barclays' ongoing efforts to shed non-core assets, as it attempts to recover from several scandals.
The French operations include its network of 74 branches, life insurance business, and wealth and investment management operations.
Barclays will continue to operate its corporate and investment banking activities in France.
"Accelerating the disposal of our non-core unit is the key to creating a simpler, more focused Barclays, and to eliminating the drag on the performance of our strong core business," said chief executive Jes Staley.
"Today's announcement, together with the sale of our Asia Wealth operations announced earlier this month, represent significant steps forward, and are tangible evidence of the progress we continue to make.
"This transaction, once completed, would effectively finish our exit from Continental European branch-based retail banking," said Staley, adding that the French unit "no longer fits" with the group's strategic ambitions.
He added that non-core asset sales would eliminate costs "which have a direct impact on our profitability today and mask the true performance of our strong core business".
In March, Barclays had revealed a shake-up of the beleaguered bank with plan to exit its African operations, having already announced its departure from Russia in January.
A consortium headed by former Barclays boss Bob Diamond had said Tuesday that it was mulling a bid for the bank's majority stake in Barclays Africa.
The troubled lender is still seeking to restore its battered reputation under the leadership of Staley.
Barclays decided last month to split the bank into two units, focusing on its operations in Britain and the United States.
Staley, an American veteran banker who began his latest role in December 2015, has been tasked with restoring the bank's battered reputation caused by a series of scandals including the rigging of foreign exchange and Libor interest rate markets.
In early morning trade on Wednesday, Barclays' share price gained 2.18 percent to 177.75 pence on London's FTSE 100 index, which was down 0.1 percent in value.
"The potential of a newly streamlined Barclays is becoming increasingly clear, as the bank continues to clear the decks of unwanted assets," noted Richard J Hunter, head of research at Wilson King Investment Management.
© 2016 AFP