Barclays Reports Profits Decline in 2022 H1 and Q2 Due to Litigation Charges

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by Ibukun Ogundare · 3 min read
Barclays Reports Profits Decline in 2022 H1 and Q2 Due to Litigation Charges
Photo: Depositphotos

During the period ended June 30th, the bank’s profit dropped more than expected.

British multinational bank Barclays reported a 48% plunge to £1.071 billion in net profit attributable to shareholders for 2022 Q2. The bank saw a decline despite meeting the £1.085 billion expected by analysts. Earlier in the year, the British bank announced that it sold 15.2 billion more in US investment products than the amount it was permitted to sell.

The British multinational bank Barclays took litigation charges worth £1.9 billion for the first six months of 2022. According to the banking giant, the charges included a £1.3 bullion cost related to the “over-issuance of securities” in the US. Additionally, Barclays revealed that the £1.3 billion in litigation and conduct charges booked in 2022 Q2 were substantially offset by a hedge that generated £758 million in income.

Also in the second-quarter Barclays reported its group Revenue at £6.7 billion. The Q2 group revenue is more than £1 billion over the £5.4 billion reported the previous year. In addition, the bank solvency measure CET 1 ratio was 13.6%, lower than the 13.5% in Q1. Barclays added that total operating expenses also jumped from £3.7 million in Q2 2021 to £5 billion in Q2 2022.

Barclays Releases 2022 H1 and Q2 Financial Results

In the first half of the year, Barclays saw a 24% decline to £3.7 billion due to the US trading error. During the period ended June 30th, the bank’s profit dropped more than expected. Previously, Barclays had reported £4.9 billion in 2021 H1. Apart from the £1.5 billion estimated cost impact from its structured products division failure, the financial institution also set aside £165 million for a potential fine. The company added that the £758 million gain realized on the hedge eased the impact of the trading mistake.

Barclays CEO C.S. Venkatakrishnan talked about the 2022 H1 and Q2 financial results. In a short video, he said:

“I’m pleased to be able to report strong financial results of the first half of 2022 for Barclays. Our group is very profitable with income of 10% compared to last year. I am particularly pleased that we have been able to demonstrate healthy income growth across all three of our main operating businesses: Barclays UK; our Consumer Cards and Payments business; and the Corporate and Investment Bank… Our performance also underlines the value of the investments which we have been making to grow Barclays and to deliver attractive returns.”

The CEO also mentioned the impact of the rising inflation on its customers and colleagues. He revealed that the company has different measures to address the situation. Noting that Barclays will continue to explore more ways to help, Venkatakrishnan referred to a half-year dividend of 2.25p per share. He continued by saying the company intends to initiate a buyback of £500 million.

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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