Barclays sees 25pc rise in first half profits - and signals plans to ramp up growth
- Credit: PA
Barclays boss John McFarlane signalled plans to ramp up growth, squeeze costs and streamline the business after announcing a 25pc rise in first half profits.
Interim results showing an increase in pre-tax earnings to £3.11bn come just three weeks after chief executive Antony Jenkins was fired over lacklustre revenue growth.
New chairman Mr McFarlane has taken the reins on an interim basis.
The rise comes despite Barclays taking a hit of more than £1bn during the period to compensate customers over scandals such as payment protection insurance (PPI) mis-selling.
This included a fresh £850m in the second quarter, mainly from an extra £600m for PPI - taking total provisions for the affair to date to just under £6bn.
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Reports have suggested Barclays is planning to speed up its cost-cutting drive by axing more than 30,000 jobs.
Mr McFarlane acknowledged the lender needed to 'accelerate growth in earnings' and slash its ratio of costs to income, though he declined to issue new targets for the group.
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He said he wanted to instil a 'high performance ethic' and 'streamline and eliminate unnecessary and cumbersome bureaucracy'.
'There is a lot we can do to accelerate our progress and the work has already begun,' said Mr McFarlane.
The executive chairman spelt out that those parts of the business that were not making enough money would soon be axed.
He said the bank would 'act quickly to curtail activity which is marginal or which will not deliver the return on equity we require'.
Mr McFarlane added: 'Barclays today has a good portfolio of businesses. However, we need to accelerate the execution of the strategy.
'There is more that can be done to deliver better returns for shareholders, faster, and that work has begun.'
He indicated a focus on UK personal and commercial banking, the bank's cards business and on Africa, as well as investment banking in Europe and the US.
Mr McFarlane had warm words for the investment banking arm. Mr Jenkins had taken the axe to the division and there has been much speculation over its future since his departure.
Pre-tax profit at the division rose by 36pc to £1.44bn in the first half as costs were squeezed.
Mr McFarlane said: 'I am personally pleased with recent progress in the investment bank.'
The period saw Barclays reach settlements with authorities of £1.6bn, mainly relating to probes by US and UK regulators into foreign exchange manipulation.
Extra provisions had already been made by the lender in the first quarter of £800m to cover 'ongoing investigations and litigation' primarily related to forex, taking the total pot to just over £2bn.
Mr McFarlane said: 'We continue to seek to put conduct issues behind us.'
Elsewhere, pre-tax profit at the personal and corporate banking division rose 4pc to £1.53bn.
Charges for loans that have gone bad fell by 23pc, attributed to the improving UK economy and particularly lower defaults of large corporate clients.
But income from personal banking was 2pc lower as customers switching to lower mortgage rates - amid fierce competition for home loan customers - put pressure on profit margins.