Double digit returns in both Barclays UK and Barclays International Group appear to have offset the hit from the US Department of Justice after its civil complaint over Residential Mortgage Backed Securities sold between 2005 to 2007 resulted in a £1.4bn settlement lodged in the Q1 results.
The bank also paid additional charges of £400m relating to Payment Protection Insurance (PPI).
Hargreaves Lansdown said: “Stripping out these conduct and litigation charges, profit before tax increased 1% to £1,725m. This was driven by an improvement in credit impairments and a 6% reduction in operating expenses. However these gains were largely offset by an 8% decline in income.”
Laith Khalaf, senior analyst at Hargreaves Lansdown, continued: “There’s a lot not to like about Barclay’s latest results, although many of the factors hampering the bank are one-off items which don’t speak for the future prospects of the business.”
“A £1.4bn settlement with the US Department of Justice meanwhile has inflicted a great deal of financial pain on Barclays this quarter, but it’s actually positive for the bank this is now resolved and in the rear-view mirror,” he added.
The remaining PPI provision as at 31 March 2018 was £1.7bn to cover claims through to the deadline of 29 August 2019.
In 2017, the bank said that total UK gross lending, including mortgages, consumer lending and business banking, was £30bn.
Overall the bank reported a £1.9bn loss in 2017, despite registering a 10% increase in pre-tax profits to £3.54bn.
It also took a major hit last year with £1.2bn of charges applied for litigation and poor conduct, including £700m towards payment protection insurance mis-selling, £2.5bn relating to the sell-off of its Africa business and a £900m US tax charge.
On the UK intermediary lending side, the lender has signaled its ambitions with a massive restructure and recruitment drive among the broker-facing team, according to an exclusive Mortgage Solutions interview with intermediary director Craig Calder.