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Abu Dhabi, UAESunday 23 September 2018

Barclays delivers on dividend despite 2017 disappointment

Bank reports £1.9 billion loss after US tax writedown and sale of Barclays Africa.

Barclays promised to restore its dividend to comfort the blow of a £1.9 billion annual loss for 2017. Tolga Akmen / AFP
Barclays promised to restore its dividend to comfort the blow of a £1.9 billion annual loss for 2017. Tolga Akmen / AFP

Barclays showed its confidence in future earnings on Thursday by restoring its full dividend, despite lacklustre investment banking income, restructuring costs and US tax reforms hitting the bank's 2017 bottom line.

Shares in the British bank were up 4.6 per cent to 211 pence at 0925 GMT, sending Barclays to the top of the FTSE index risers after it said it would resume paying its full dividend of 6.5 pence per share, which it halved in March 2016 in order to provide extra funds to pay for restructuring.

"It is our firm intent, over time, to return a greater proportion of our earnings to shareholders, both through the annual dividend and in other ways," Barclays chief executive Jes Staley said in a statement.

Although Barclays posted a pretax profit of £3.5 billion (Dh17.9bn) for 2017, up from £3.2bn a year ago, this was worse than the £4.7bn average of analysts' forecasts compiled by the bank.

And the group reported a £1.9bn attributable loss, after a £901 million tax write-down in the United States and a £2.5bn loss on the sale of Barclays Africa.

Barclays has been blighted by corporate governance and conduct concerns, and it booked an additional £240m provision relating to alleged foreign exchange manipulation.

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But it gave no update on a Financial Conduct Authority inquiry into Staley over his attempts to unmask a whistle-blower who had raised concerns about a Barclays executive.

However, it said the financial watchdog had begun a new probe into its systems and controls for the handling of customers with troubled unsecured loans. It said it could not yet estimate the financial impact of this.

Barclays was the worst-performing bank in the FTSE 100 index in 2017, falling nine per cent on concerns about both its investment bank and its legal and regulatory troubles.

Staley has championed an aggressive push in investment banking that has so far largely failed to bear fruit.

Profit in the Barclays International division was down 22 per cent, driven by a 4 per cent fall in income from its investment bank and rising impairments, the bank said.

"We have strong plans in place to address that underperformance in 2018," Staley said.

Barclays' investment bank has struggled to keep pace with US peers in recent quarters, despite plans announced in October to shift some £20bn in assets from corporate lending to riskier but higher-yielding trading activities.

Chief Financial Officer Tushar Morzaria said that the bank had gained market share, with business down in dollar terms by 10 per cent compared with 20 per cent at its biggest US rivals.

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