Barclays rebounds into profit in 2018

London, United Kingdom | AFP | Barclays rebounded sharply into profit in 2018, as a vast hit from the previous year on the sale of its African business was not repeated, the British bank announced Thursday.

The lender’s performance came despite vast litigation costs and a new charge on the impact of mounting economic uncertainty over Brexit.

Net profit, or earnings after tax, reached £1.4 billion ($1.8 billion, 1.6 billion euros) last year, Barclays said in a results statement.

That contrasted with a large loss of £1.9 billion in 2017, when it had taken a vast £2.5-billion hit on the sale of Barclays Africa Group Limited.

The lender nevertheless faced litigation and conduct charges in 2018 of £2.2 billion.

That was in large part due to a £1.4-billion US fine over its conduct in the run-up to the global financial crisis.

It also included another £400 million in costs for payment protection insurance (PPI) mis-selling claims.

However, credit impairment charges sank 37 percent to £1.5 billion.

Turning to Brexit, Barclays revealed it took a £150-million charge in the fourth quarter on “the impact of the anticipated economic uncertainty in the UK”, as the nation prepares to leave the European Union next month.

“2018 represented a very significant period for Barclays,” said chief executive James Staley.

“In the course of the year, having resolved major legacy issues and reduced the drag from low returning businesses, we started to see the earnings potential of the bank, as the strategy we have implemented began to deliver.

“This was evident in the improved performance across the group compared to 2017.”

On Wednesday, rival Lloyds Banking Group had acknowledged Brexit uncertainty but expressed hope that London would avoid a chaotic no-deal departure from the EU.

Britain will leave the bloc on March 29 — but many businesses are still fretting over the possibility of no-deal.

Both HSBC and Royal Bank of Scotland have warned over a possible upset to their operations as a result of Brexit.