Barclays profit slides as trading blunder and deal slump bite

Barclays reported a 14 per cent fall in annual profits as costs from an administrative blunder that saw it oversell securities in the United States compounded a collapse in deal fees earned by its investment bank.

The British lender reported a pretax profit for 2022 of £7 billion (€7.89bn), down from £8.2 billion the year before and just below the £7.2 billion average analyst forecast, as compiled by the bank.

Returns on equity booked by the international unit which houses Barclays’ transatlantic investment bank fell to 10.2 per cent from 14.4 per cent a year earlier, as fees from advising on debt and equity fundraising plunged by almost two-fifths year on year.

Profits before tax in that division also tumbled by 23 per cent to around £5 billion.

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Barclays reported revenues from Fixed Income, Currencies and Commodities (FICC) trading, its traditional strength, rose 65 per cent to £5.7 billion from the previous year, beating US rivals Morgan Stanley and Goldman Sachs which reported 20 per cent and 38 per cent year-on-year increases respectively in 2022.

Barclays paid an annual dividend of 7.25 pence per share, in line with forecasts, and also announced a fresh share buyback of £500 million to bring the total for 2022 to £1 billion.

Barclays posted litigation and conduct charges for the year of £1.6 billion, including fines and restitution to customers from overstepping agreed limits on sales of investment products in the United States.

In its annual report also published on Wednesday, Barclays said it had docked top executives’ pay by a combined £1 million to reflect the regulatory missteps.

Barclays’ results were further marred by £1.2 billion in credit impairment charges as Britain’s economy continued to slow.

Barclays is the first big British bank to report its annual earnings this week, with analysts and investors likely to focus more on the bank's forward-looking guidance about the outlook for this year, than on its performance in 2022.

The lender said it would achieve its goal of making a more than 10 per cent return on tangible equity next year, having previously described this as a ‘medium term’ goal. -Reuters