Barclays posts loss in 2nd quarter as Staley takes hit to end restructuring

Bloomberg

Jes Staley finally has the Barclays Plc he wants. But it cost him.
The lender posted a net loss in the second quarter, driven by the cost of selling down its Africa unit and an unexpected charge for the payment protection insurance scandal. The bank said it now aims to earn a return on tangible equity of more than 10 percent as it moves
past the issues that have weighed on profitability.
Barclays sold most of its stake in the Africa unit and closed the non-core division last quarter, leaving Staley with the UK and US-focused lender that the chief executive officer pitched as his vision for the bank. While the consumer and cards businesses produce healthy returns, the investment bank uses the bulk of the firm’s capital and must still show it can consistently reach Staley’s profitability targets.
“Our business is now radically simplified, the restructuring is complete,” Staley said in a statement. “We can now focus on what matters most to our shareholders: improving group returns.”
Barclays had a loss attributable to shareholders of 1.4 billion pounds ($1.8 billion), its first quarterly loss since 2015. Excluding the one-time costs, Barclays posted adjusted pretax profit of 1.4 billion pounds. Analysts had expected adjusted profit of 1.2 billion pounds, according to the average of six estimates compiled by Bloomberg News.
The bank’s shares swung between gains and losses, trading 0.5 percent lower at 207.55 pence as of 10:40 a.m. in London. Barclays has lost 7.2 percent this year, making it the worst performer in the 37-member Bloomberg Europe Banks and Financial Services Index.

‘Cleaner’ Ahead
The unexpected item was a 700 million-pound charge for PPI customer compensation, the same amount Lloyds Banking Group Plc set aside Thursday. Barclays has now set aside more than 9 billion pounds to cover the costs of the scandal, which results from British firms selling customers insurance products they didn’t want or need.
“We view this as the last quarter for sizable restructuring-related charges and expect cleaner earnings ahead,” said Raul Sinha, an analyst at JPMorgan Chase & Co. with an overweight rating on the stock.
The Barclays CEO has repeatedly said he wants to keep a “bulge-bracket” investment bank capable of competing with the best on Wall Street and brought in his former JPMorgan Chase & Co. colleague Tim Throsby to lead it. The unit performed better than expected in most areas in the quarter and posted a return on tangible equity above 10 percent for the first time under Staley.