Barclays' profits were hit by compensation charges and fines. That included a £290m Financial Services Authority fine for its infamous role in the Libor-fixing scandal, as well as a £300m provision for payment protection insurance claims. A further £450m was also set aside to cover redress for mis-selling interest rate hedging products to small businesses. Add such reputational issues to its hefty eurozone exposure, and the shares remain high risk.
Credit quality progress wasn't great, either, and the impairment charge was roughly flat year on year at £1.83bn. UK retail impairment charges fell 56 per cent, which helped adjusted profits there rise 6 per cent to £746m. But investment bank impairments soared 58 per cent to £323m in the half, leaving profits down 2 per cent year on year at £2.27bn, although that's a big improvement on the division's 2011 second-half profit of £655m. Impairments rose in the home loan book of the South African Absa operation, too. Still, Barclays does boast an apparently robust 10.9 per cent core tier-one capital ratio.
Broker Investec Securities expects full-year pre-tax profits to fall from £5.8bn to £3.8bn, giving EPS of 14.5p (25.1p in 2011).
BARCLAYS (BARC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 160p | MARKET VALUE: | £19.58bn | |
| TOUCH: | 159-160p | 12-MONTH HIGH: | 260p | LOW: 134p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 443p | |||
| Half-year to 30 Jun | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2011 | 2.64 | 12.5 | 2.00 |
| 2012 | 0.76 | 0.6 | 2.00 |
| % change | -71 | -95 | - |
Ex-div: 8 Aug* Payment: 7 Sep* *Relates to second-quarter dividend of 1p a share only | |||
