Barclays profits up despite legal cost increases
BARCLAYS’ profits edged up on the year, the bank said yesterday, in another sign the lender is benefiting from the economic recovery.
In a surprise early announcement, the lender said it made a statutory pre-tax profit of £2.9bn in 2013, up from £2.46bn in 2012.
It comes after the bank revealed another £330m of legal bills for the final quarter of 2013.
The figures were published early as press reports based on analysts’ estimates of the profits were very close to the real number.
Industry-watchers expect the full results to show some slippage in the plans to cut costs in the bank’s sizeable investment banking arm.
Chief executive Antony Jenkins set out plans a year ago to slash costs across the business in a long-term drive to make Barclays more efficient.
“It is likely that Barclays Capital will account for the bulk of what we see as a fourth quarter cost “overrun” – the full-year 2013 underlying group costs are still guided at £18.5bn – in line with Barclays’ previous target and consistent prior guidance, though worse than what we believe the business could (and should) have delivered,” said analyst Ian Gordon from Investec.
Over the next decade the bank is expected to shed tens of thousands of jobs, in large part because of new technologies.
Developments like a new service to photograph cheques on a phone and cash it remotely have removed the need for some customers to go to branches.
As a result, hundreds of branches will also be closed in the coming years.
Barclays’ share price increased 1.21 per cent on the day.