Tom Burroughes
Group Editor
27 July 2012
Daily News Analysis
The wealth and investment management arm of UK-listed Barclays, the bank which has been hit by a LIBOR-rigging scandal that saw the resignation of chief executive Bob Diamond, logged pre-tax profits of £121 million (around $189 million) in the first half of 2012, a 38 per cent year-on-year increase.
For the banking group as a whole, it made an adjusted pre-tax profit of £4.227 billion, a 13 per cent rise from the same six months in 2011; net operating income was $13.643 billion, a 1 per cent gain. The bank’s cost/income ratio was 61 per cent in the latest six-month period, down from 64 per cent. Barclays had a Core Tier 1 ratio of 10.9 per cent at the end of June this year, down slightly from the end of last year.
But while the wealth and investment results were positive, much of the market focus was expected to be on statements the bank made about the LIBOR scandal and the likely impact going forward.
“These remain challenging times for Barclays, as well as the industry, and we are sorry for what has happened because of recent events. However our leadership continues to focus on the delivery of our financial performance targets and on building a platform for sustainable long-term growth. I am confident we can and will repair the reputational damage done to our business in their eyes and those of all our stakeholders,” Marcus Agius, chairman, said in a statement.
Barclays has incurred penalties from US and UK authorities totaling £290 million (around $455 million) for misconduct relating to the inter-bank interest rate market. Meanwhile, a number of other banks, including the likes of UK-listed Lloyds Banking Group, are said to be under investigation about the matter.
Income
Back in the wealth and investment arm, this unit logged net interest income in the six months to end-June of £419 million, up 14 per cent year-on-year. The unit held total client assets of £176.1 billion, up from £164.2 billion at the end of last year. Customer deposits rose to £50 billion from £46.5 billion at the end of 2011.
A total of 8,000 staff worked at the wealth and investment arm of Barclays, down by 100 since the end of December.
