Barclays has posted an 8 per cent fall in annual profits before tax and has announced a major restructure of the business.
The bank’s full-year results published today (1 March) revealed profit before tax dropped to £2.1bn last year, as the bank set aside another £1.4bn for the mis-selling of payment protection insurance (PPI).
Underlying profits fell 2 per cent to £5.4bn, from 2014’s figure of £5.5bn.
On further costs related to customer complaints about PPI, the bank said: “The committee and management will continue to monitor closely any changes in customer or claims management companies’ behaviour in light of the Plevin case and the proposed timebar.”
The bank is also preparing for an overhaul of the business, establishing three separate banks: Barclays UK, Barclays Corporate & International, and Barclays Africa, each of which will have its own board, chief executive, management team and certain operational services.
As a result of the drop in profits, the bank will reduce its dividend to 3p per share in 2016 and 2017.
Jes Staley, chief executive, said the reduction of the dividend is the “right choice”.
“I recognise the importance of paying a meaningful dividend as part of total shareholder returns and am committed to doing so in the future.
“These are hard decisions, but we believe the shareholder value created by getting non-core closed will greatly exceed the downside of cutting the dividend for the next two years.”
Mr Staley added was confident the restructure would improve efficiency and establish a “simpler and very profitable Barclays”.
“This [restructure] has the additional benefit of decentralising the very large corporate centre and results in a more streamlined, accountable and lower cost organisation.”
The bank remained confident that the core business performed well, posting a 3 per cent increase in profit before tax to £6.9bn.
katherine.denham@ft.com
