Barclays posts £1.9bn loss amid US tax and PPI charges

Barclays has posted a £1,922 million attributable loss in its full year results, due to a £2.5 billion write down on its sale of Barclays Africa, £1.2 billion of conduct charges and a £0.9 billion tax charge relating to US tax reform.

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Rozi Jones
22nd February 2018
Barclays
"Claims activity may yet confound expectations, so we could get further incremental changes to the bank’s provisions in the next eighteen months."

However pre-tax profits rose by 10% to £3.5 billion.

Jes Staley, Group CEO said: "2017 was a year of considerable strategic progress for Barclays. The sell down of our shareholding in Barclays Africa, closure of our Non-Core unit, the establishment of our Service Company, and the creation of our UK ring-fenced bank, mean that, in terms of size and structure, we are now the diversified Transatlantic Consumer and Wholesale bank we set out in our strategy in March 2016.

"While we still have a number of legacy conduct issues to address, I am confident in the capacity of this business to generate excess capital going forward, and it remains our intention over time to return a greater proportion of that excess capital to shareholders through dividends, and other means of capital distribution, including share buybacks."

Laith Khalaf, senior analyst at Hargreaves Lansdown, commented: "Arnold Schwarzenegger and Donald Trump don’t always see eye to eye, but they have double-teamed Barclays, with the bank’s full year profits dragged down by US tax reform and a PPI campaign fronted by everyone’s favourite bodybuilder.

"The tax charge is a one-off, and actually lower US taxes should be positive for Barclays in the longer term. Barclays also thinks it has now done enough on PPI to get through to the 2019 claims deadline, after taking another £700 million hit in 2017 and lifting its total bill to £9.2 billion. However claims activity may yet confound expectations, so we could get further incremental changes to the bank’s provisions in the next eighteen months.

"Progress has been made at Barclays, most notably in consigning its non-core business to the history books, which has resulted in a significant fall in operating costs. The business has also been de-risked, boosting capital ratios and giving the bank confidence to increase the dividend back to where it was in 2015. However Barclays will be hoping top line growth isn’t so elusive in the coming year."

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