Barclays share price tumbles even as bank’s profit more than doubles

on Apr 28, 2017
Updated: Oct 21, 2019

Shares in Barclays (LON:BARC) have fallen deep into the red this morning, even as the group revealed that its profits had more than doubled in the first three months of the year. The company, however posted a hefty one-off charge on its Africa business. Barclays’ results come against the background of a regulatory probe into the group’s chief executive into his attempts to uncover a whisleblower which has prompted questions about his future at the bank.

As of 09:14 BST, Barclays’ share price had lost 4.15 percent to 214.65p, underperforming the benchmark FTSE 100 index which has slipped marginally into the red and currently stands 0.30 percent lower at 7,215.62 points. The group’s shares have gained more than 22 percent over the past year, but have given up some four percent in the year-to-date.
Barclays reported in a statement this morning that its profit before tax had more than doubled to £1.68 billion in the first quarter, driven by improved profitability in the company’s core business and materially lower losses in non-core of £241 million. The bank, which has been undergoing a restructuring under chief executive Jes Staley, however, posted a one-off £884 million charge on its Africa business.

“This has been another quarter of strong progress towards the completion of the restructuring of Barclays,” Staley said in today’s statement. “We are now just two months away from completing the restructuring of Barclays as a Transatlantic Consumer, Corporate and Investment Bank and there is further good reason in this quarter’s performance to feel optimistic for our prospects.”
Analysts, however, have been less upbeat.
“The bank continues to ride a capital tightrope,” Bernstein analysts said in a note, as quoted by Reuters.
The results come as Staley faces regulatory probes over his attempts to uncover a whistleblower at the bank. The Times reported today that Institutional Shareholder Services, whose clients include many British investors, had said that because of the investigation, shareholders should abstain from backing his re-election to the board at the bank’s annual shareholder meeting on May 10.
“Given his personal involvement and accountability in this matter, and given the importance of his role as the group chief executive officer, an abstention on his re-election is considered appropriate,” ISS said, while adding that a vote against him was “not considered warranted at this time,” because the board had reprimanded him and the bank was co-operating with the investigations. The newspaper, however, notes that other advisory groups, including Pirc and Glass Lewis, support Staley’s reappointment.
As of 09:44 BST, Friday, 28 April, Barclays share price is 214.59p.

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