Barclays Q1 Profit Hit By Additional Currency Provision

(RTTNews) - UK-based lender Barclays Plc. (BARC.L, BCS) Wednesday reported a sharp decline in the first-quarter profit, as the lender made hefty provisions, mainly related to foreign exchange.

Attributable profit fell to 465 million pounds from 965 million pounds in the previous year. The figures are on a continuing operations basis.

Provisions of 2.050 billion pounds have been made for investigations and litigation primarily relating to foreign exchange.

The lender provided additional 800 million pounds for currency-related probes, an additional 150 million pounds for payment protection insurance redress, and a 118 million pounds loss primarily relating to accumulated currency translation reserves recycled upon the completion of the Spanish business sale.

Adjusted profit improved 20 percent to 1.059 billion pounds, amid improvements in the Investment Bank, Personal and Corporate Banking or PCB and Africa Banking.

Profit before tax declined to 1.337 billion pounds from 1.812 billion pounds. Group adjusted profit before tax increased 9 percent to 1.848 billion pounds as core adjusted profit before tax increased 14 percent.

Net operating income dropped to 6.081 billion pounds from 6.221 billion pounds reported last year.

Core income rose 2 percent to 6.420 billion pounds. Core return on average equity increased to 10.9 percent from 10.7 percent.

Investment Bank's core income rose 2 percent to 2.149 billion pounds due to higher Banking, Macro and Equities income.

Africa Banking generated core income of 948 million pounds, up 8 percent from last year, supported by an increase in transactional income in South Africa, higher trading income and an increase in net interest income.

Barclaycard improved core income by 9 percent to 1.135 billion pounds, reflecting continued net lending growth across all geographies.

Antony Jenkins, chief executive, said the company is working hard to settle legacy issues, which is also an important part of its plan to transform Barclays.

Further, Barclays set a first interim dividend of 1.0 pence to be paid on June 15.

The stock fell 0.8 percent to 259.45 pence in early trade.