BARCLAYS SINKS TO £1.2BN LOSS ON AFRICA WRITE-DOWN AND £700M PPI HIT

28 July 2017 - Barclays made a loss of £1.2bn in the first-half of the year after selling part of its Africa business and forking out an extra £700m to cover costs from the payment protection insurance scandal.

The FTSE 100 giant reduced its stake in Barclays Africa to around 15pc in June as part of chief executive Jes Staley’s ambition to focus the bank on Britain and the US.

That turnaround is now complete, Mr Staley said on Friday, adding that the sale of non-core assets means investors can "can benefit from the full earnings power of this business" sooner than expected.

That didn't stop shares in Barclays dipping , however, as the cost of Mr Staley's overhaul weighed on the results. Stripping out the Africa deal, the lender posted a 13pc rise in pre-tax profits to £2.3bn.

Mr Staley admitted that reducing the bank's footprint over the last year and a half had not been cheap, but added "we finally have clear wind in front of us and we'll let the results speak to ourselves in the quarters ahead."

However, like many of its rivals, the bank is still plagued by the payment protection insurance (PPI) scandal, which has cost it over £9bn after it put another £700m aside because of an expected spike in claims ahead of the August 2019 deadline for complaints.

Mr Staley said the bank has set a new target to achieve a greater than 10pc return on equity, but didn't specify exactly when that would be, arguing that it is hard to predict market activity.

With a renewed focus on America and Britain, the 60-year-old also sent out an upbeat message on the City post-Brexit. "We continue to be very committed to London and think it will remain the financial capital of the EU," he said.

Although the completion of the restructure signals a major milestone for the bank, City analysts warned that Barclays' bosses will now face extra pressure to perform, especially as it is still facing a string of regulatory issues.

"More litigation problems are waiting in the wings, with the bank in trouble with the FCA, the SFO and the US Department of Justice, a formidable triumvirate of adversaries," said Hargreaves Lansdown analyst Laith Khalaf. "Now Barclays is in the shape envisaged by management, the pressure is on to perform."

The Telegraph