The Banking and Strategy Initiative

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European Bank Results Season: Barclays loses 38%, with Barclays Capital still reporting $10 bln

1 Churchill Place, London, UK - Barclays Wealt...

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After Payment protection Insurance costs of GBP 1 bln or $1.5 bln, the bank profits for the half year were GBP 300 mln lower at GBP 2.68 bln of which GBP 2.31 bln or $3.45 bln was profit reported by Corporate investment Banking or the Barclays Capital Team

Barclays also holsds $54 bln worth of PIIGs mortgages and incl sovereign the peripherals’ exposure mounts to $80 bln. BNP also reported lower profits and the blood letting will continue till Lloyds falls out on Friday, leaving the Banking system weakened and debilitated in Europe before and after the crisis. ING and SocGen are still busy disposing off assets as per their respective agreements for Capital with the government There is very little right now that sets Baudoin Prot apart from Bob Diamond right now, and Deutsche Banka nd HSBC seemm to have opened up a lead of more than a lap each on the demanding year long circuit

Barclays half year income (TOI) is restricted to $24 bln and the 15% return on income from Barclays Capital has grown the Bank’s reurn on equity to a yet not respectable 9% Total Income at Barclays Capital was a GBP 6.465 bln or $ 9.7 (WSJ)bln

(WSJ)The U.K.-based bank said net profit was £1.5 billion, down from £2.43 billion in the same period a year earlier. Pretax profit—a figure tracked by U.K. analysts—was £2.64 billion, compared with £2.95 billion a year earlier.

Retail SME and Commercial Banking, termed Retail and Business Banking at Barclays HQ produced only $699 mln in profits mostly with UK retail ( $1.1 bln ) and Barclayscard ($900mln) written down by the PPI penalties

The rOI of 9% excludes the charge on PPI. One billion each in income is contributed by Barclays Corporate Banking and Wealth ( topline)

(From the Results announcement) In Spain, we substantially
strengthened our management team and reached agreement with
labour unions and the Government to restructure our network
and cost base which will see a 20% reduction in the branch
network and a 16% reduction in  headcount.
In Europe RBB, we broke even in June before
restructuring. Our European business has a way to go before
reaching our target return thresholds but we are taking the
tough decisions that will put this on track. In Barclaycard
we acquired the Egg consumer card assets and MBNA corporate
card portfolio in the UK. And in Africa RBB we are integrating
the operational management of Absa and Barclays activities in
the rest of the African continent to position ourselves better
to take advantage of the economic growth opportunities which
we expect in Africa in the years to come.

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