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Barclays shows ‘good mortgage growth’ despite profit fall

by: Adam Williams and Dan Jones
  • 24/04/2013
  • 0
Barclays shows ‘good mortgage growth’ despite profit fall
Barclays' Q1 adjusted pre-tax profit has dropped 25% to £1.8bn after the bank took a £500m hit over its restructuring programme.

Analysts had expected headline pre-tax profit to stand at between £1.85bn and £2.1bn.

The bank’s income was flat at £1,067m, it said this reflected £25m of additional income from the ING Direct acquisition and ‘good mortgage growth’.

Mortgage Solutions reported yesterday that the staff of the former ING bank, now known as Barclays Direct, have been placed under a 90 day consultation period. Barclays is seeking to integrate ING into its existing structure.

The acquisition of ING Direct UK added £11.4bn customer deposits and £5.3bn mortgage balances to the bank’s balance sheets.

Reporting results for the first quarter of 2013, the bank said adjusted pre-tax profit would have risen 6% were it not for the £514m charge relating to its ‘Transform’ programme and a £235m hedging gain made last year in Q1 2012.

Barclays’ ‘Transform’ programme will see CEO Antony Jenkins axe 3,700 jobs and cut back the investment banking business.

“In our goal to become the ‘Go-To’ bank we have not chosen an easy path for Barclays, but we have chosen the right one,” Jenkins said.

At a headline level, statutory profit before tax improved to £1.54bn, up from a £525m loss in Q1 2012, as the bank booked a much lower credit charge (£251m versus £2.6bn last year).

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