Barclays Sees Weaker First Quarter in Investment Bank Unit

  • Non-core performance will also ``deteriorate'' on writedowns
  • Barclays stock is trading at its lowest level since July 2012

Barclays Plc said it expects its investment bank to post a drop in earnings in the first quarter from a year earlier, with results at the non-core division also deteriorating.

While the firm’s investment banking operations were “broadly in line” with 2015 in January and February, performance was weaker in March, the London-based bank said in a statement Tuesday. Non-core income will probably drop because of markdowns on the bank’s education, social housing and local authorities loan portfolio, according to the statement.

The firm joins rivals including Credit Suisse Group AG and JPMorgan Chase & Co. in warning investors of a decline in first-quarter revenue from investment banking units. Europe’s embattled lenders have been shrinking their trading businesses and cutting tens of thousands of jobs as regulators step up scrutiny of riskier activities and economic turmoil at home and across emerging markets erodes revenue.

The shares fell 2.7 percent to 146.15 pence at 3:25 p.m. in London, extending its decline this year to 33 percent. The stock is trading at its lowest level since July 2012, losing all the gains made under former Chief Executive Officer Antony Jenkins, who took the top job in August of that year and was fired last July.

Barclays said it will also seek shareholder approval for the proposed deconsolidation of its Africa business at its annual general meeting for shareholders in London on April 28, a day after it reports first-quarter results. The bank is considering “both strategic and capital markets-led” options for the sell down of its 62 percent holding, which it announced last month.

CEO Jes Staley, 59, eliminated more than 6,000 positions in his first 100 days in charge of Barclays and has pulled the investment bank out of countries including Brazil, Russia and the Philippines. The bank has seen about 20 billion pounds ($28 billion) of profit in the past five years wiped out by misconduct charges.

In the first three months of 2015, the investment bank division reported net operating income of 2.1 billion pounds and profit before tax of 675 million pounds, company filings show.

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