Barclays takes a beating amid torrid time for banks


Banking giant Barclays saw its shares take a hammering after it reported a slide in annual profits and slashed shareholder dividend payments for the next two years.

The high street lender saw trading in its shares temporarily suspended for the second time in less than a month as the stock tanked by as much as 11%.

The collapse of the share price - which has fallen 41% in the past year - came as the bank reported a 2% fall in underlying pre-tax profits to £5.4 billion after it took a further £1.45 billion charge for payment protection insurance mis-selling in the fourth quarter.

It also announced a group-wide shake-up that will see the bank split into two divisions - Barclays UK and Barclays Corporate and International - and the group offload most of its stake in its Africa business over the next two to three years.

Its figures cap off a torrid results season for the major banks, with Royal Bank of Scotland, Lloyds and Santander all stomaching further PPI charges, as the mis-selling scandal continues to loom large over the industry.

One analyst branded Barclays annual performance as "pretty dismal", with pre-tax profits down 8% to £2.1 billion on a bottom-line basis, while its investment bank turned in a £146 million loss in the fourth quarter.

Profits at the retail arm of the bank slipped back in the final quarter of the year, falling 23% to £657 million compared with the third quarter of 2015.

The bank also forecast a gloomy start to the year, with the first quarter set to be weaker than last year in the face of turbulent market conditions and a "particularly strong March in 2015".

Jes Staley, who replaced Antony Jenkins at the helm in December, insisted the bank's performance in 2015 showed Barclays "is fundamentally on the right path, and is, at its core, a very good business".

But investors were left disappointed after revealed its total dividend payment of 6.5p for 2015 would be more than halved - to 3p - for the next two years.

Barclays blamed regulatory pressures for its "very difficult" decision to sell down its 62.3% stake in Barclays Africa Group Limited (BAGL), which serves 12 million customers across 12 countries.

Mr Staley added: "The reality is, in this new regulatory environment, we carry 100% of the liabilities but only own 62% of Barclays Africa."

But it went against speculation that it would quit Africa altogether, stating its interest in holding a minority stake in BAGL.

Barclays said the continuation of the recruitment freeze, coupled with the ring-fencing shake-up and the sell-off of its non-core businesses - including Africa - would lead to significantly more job losses.

The bank has cut more 5,700 jobs from the group since it started the recruitment freeze in autumn last year.