BCS Barclays PLC

By Sabela Ojea

Barclays PLC on Thursday reported a significant decline in second-quarter pretax profit, missing market views, after booking higher operating costs and impairments which it said are set to continue rising, and outlined another share buyback program.

The FTSE 100-listed bank said it intends to initiate a further buyback program of 500 million pounds ($607.8 million) and posted a pretax profit for the second quarter of GBP1.50 billion compared with GBP2.50 billion for the same period a year earlier. Pretax profit was expected to decline to GBP1.63 billion, according to the bank's compiled consensus.

The U.K. bank said total operating expenses rose to GBP5.02 billion and credit impairments to GBP200 million, up from GBP4.11 billion and GBP141 million, respectively, in the previous quarter. The lender was expected to book expenses and impairments of GBP4.60 billion and GBP281 million, respectively.

The bank's costs include litigation and conduct charges mainly linked on securities it oversold by mistake for around a year in the U.S., which made it book a GBP450 million provision for the first quarter of 2022.

Barclays' total income increased to GBP6.71 billion from GBP5.42 billion for the prior year. Total income was anticipated to rise to GBP6.50 billion for the second quarter of 2022, taken from the bank's compiled forecasts.

The bank ended the period with a common equity Tier 1 ratio--a key measure of balance-sheet strength--of 13.6%, down from forecasts of a ratio of 13.8% and from a ratio of 15.1% as at Dec. 31.

The board has declared an interim dividend of 2.25 pence a share, up from 2.0 pence a year earlier. The board was expected to declare a payout to shareholders of 2.3 pence a share.

Regarding its outlook for the year, Barclays said it now expects total operating expenses at around GBP16.7 billion, up from its previous outlook of GBP15 billion, but added that its diversified income streams position the group well for the current economic and market environment and rising interest rates.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

July 28, 2022 03:24 ET (07:24 GMT)

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