Barclays share price subdued as litigation costs weigh on HY profits

Blue-chip lender reaffirms dividend plans

Barclays share price subdued as litigation costs weigh on HY profits

Shares in Barclays (LON:BARC) have slipped into the red as the blue-chip lender reported a drop in pre-tax profits for the first half of the year following a hefty settlement with the US Department of Justice in March. Excluding litigation and conduct charges, however, the lender posted a rise in profits, and noted that the second quarter was the first one in quite some time without significant conduct charges.

As of 08:40 BST, Barclays’ share price had given up 0.71 percent to 190.34p, marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.42 percent lower at 7,620.49 points. The group’s shares have lost a little over eight percent of their value over the past year, as compared with about a 2.7-percent gain in the Footsie.

Barclays posts interim update

Barclays announced in a statement today that its profit before tax had come in at £1.66 billion in the first half of the year, down from £2.34 in the prior-year period. Excluding litigation and conduct charges, the lender’s profit before tax increased 20 percent to £3.70 billion with the group benefitting from a 46-percent improvement in credit impairment charges and a five-percent reduction in operating expenses.

“The first half of 2018 has been characterised by strong financial performance and increased profitability,” the bank’s chief executive Jes Staley commented in the statement, adding that the second three months of the year had marked Barclays’ “first quarter for some time with no significant litigation or conduct charges, restructuring costs, or other exceptional expenses which hit our profitability”.

Barclays further noted that it would pay an interim dividend of 2.5p and reaffirmed its plans for a total  dividend of 6.5p for the current year.

Light at the end of the tunnel

“The clouds are beginning to clear at Barclays as it ushers in a new era as a more effective and streamlined global bank,” Richard Hunter, head of markets at Interactive Investor, commented, as quoted by the BBC, adding, that the “light at the end of the tunnel seems to be getting brighter”.

As of 09:12 BST, Thursday, 02 August, Barclays share price is 190.48p.

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