Barclays Group  

Barclays US fine plunges it to a loss

Barclays US fine plunges it to a loss

Barclays plunged to a £236m loss for the quarter to the end of March 2018 as a result of a £1.4bn settlement it was forced to make with US regulators over the sale of mortgage backed securities.

The company also set aside £400m for further payment protection insurance claims.

Aside from the one off items, Barclays results achieved a number of the metrics analysts like to see.

Profits excluding one-off items was £1.7bn, an increase of 1 per cent on the £1.68bn for the same quarter last year.

Rob James, banks analyst at Old Mutual Global Investors, said banks should be achieving a return on equity of 10 per cent to be considered successful.

In this set of results Barclays return on equity excluding one-off items was 11 per cent.

Investors concerned about the dividend potential for the stock will note the core tier one capital ratio was 12.7 per cent, down from the previous level of 13.3 per cent.

The core tier one capital ratio matters because it is the portion of their balance sheet assets held in liquid instruments such as cash and bonds.

If this portion falls below a certain level the regulator has the power to restrict the potential for dividends to be paid.

Barclays paid a dividend of 2p in 2017, and in these results indicated it expects the payout to increase to 6.5p in 2018, subject to regulatory approval.

Barclays has an "activist" investor on the shareholder register, Edward Bransom, who has called for greater returns to be achieved from the investment side of the bank.

Both this business unit and the UK retail bank achieved a return on equity of at least 10 per cent during the quarter.   

david.thorpe@ft.com