Barclays Suffers Mixed Results

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Barclays (LSE:BARC) saw its adjusted profits before tax in the UK retail and business banking operation to rise sharply at 60% to £1.42 billion compared with £889 million it posted in 2010, figures shown in the last reported fiscal year.

Barclays were able to increase profits in the retail and business banking division by 48% from £2.235 billion to £3.302 billion a year ago.

Elsewhere, in Africa, retail and business banking also rose 26% from £723 million to £908 million, while Barclaycard posted 53% gain from £791 million to £1.208 billion.

The European operation, however, slipped a further 39% from its 2010 losses. A loss of £234 million, or £66 million more compared to £168 million loss in 2010, was due to operating expenses of £1.211 billion and Spanish goodwill impairment of £427 million, which negated the £965 million net operating income gathered.

Barclays reduced the number of branches by 142, most are located in Spain, and increased its sales centres and maintained roughly the same number of customers.

Further Losses

Further losses were abated as the bank was able to reduce its sovereign debt exposure by 13.41%, mostly from Spain, Italy, Portugal,Ireland, and Greece. Sovereign debt exposure is now down to £7.1 billion from £8.2 billion during the previous term.

Corporate and investment banking showed a 23% decline from £4.001 billion to £3.091 billion.

Nonetheless, the corporate investment arm was able to recover from a loss in 2010 to gains of £128 million, making Barclays Capital the contributor for the poor performance of the division.

Barclays was able to reduce operating expenses by almost a billion pounds, however offset by provision for payment protection insurance (PPI).

Overall, Barclays finished 13% less profit after tax compared to its 2010 figures and resulted to a 17% decline of basic earnings per share from 30.4 pence to 25.1 pence.

Still, the bank will be paying a final dividend of 3 pence per share on 16th March 2012, making the total dividend per share for 2011 at 6 pence, a 9% increase from the 5.5 pence it paid for its 2010 year end performance.

Barclays’ highlighted facts that the company was able to support the establishment of more than a hundred thousand businesses, investing £500 million in Business Growth Fund to help small and medium-sized businesses in the UK.

In midday trading, shares of Barclays are slightly up by 2.1% to 237.70 pence a share at a turnover of 60 million shares.

CEO Comments

However difficult the economic conditions were during the last year, Chief Executive Officer Bob Diamond said he is proud of the performance of the people at Barclays.

“I am proud of what our people at Barclays achieved in 2011. Against the backdrop of challenging economic and market conditions, we maintained our focus on clients and customers while supporting the real economy, as well as the needs of our shareholders, colleagues and the communities in which we operate. As a result, we have delivered a strong set of results, both financially and in terms of our execution priorities.”

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