Barclays Posts Sharp Decline In Earnings After Restructuring Charge

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Barclays PLC (NYSE:BCS) (LON:BARC) reported its first-quarter earnings this morning, posting a 25 percent drop in pretax profit as it focused on restructuring. It said earlier this year that it would cut almost 4,000 jobs as it shut down several of its divisions.

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The bank took a €514 million charge to cover those job cuts, which are part of its Project Transform. The project is designed to restructure the bank’s operations. Barclays PLC (NYSE:BCS) (LON:BARC) is planning on another £500 million charge later this year in connection with its restructuring plans.

The bank’s pre-tax profit after adjustments was £1.8 billion ($2.7 billion), compared to £2.4 billion in the same quarter a year ago. Including a £251 million accounting charge, the bank’s first-quarter profits were £1.5 billion, compared to a loss of £525 million in the same quarter a year ago.

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Barclays PLC (NYSE:BCS) (LON:BARC)’s investment bank generated most of its pre-tax profit, posting strong first-quarter results. It posted an 11 percent increase in profits to £1.3 billion. The bank’s wealth management division posted pre-tax profits of £60 million—a 20 percent increase over the same quarter a year ago. Its retail unit reported pre-tax earnings of £299 million—a 28.8 percent increase over the same quarter a year ago.

Analysts expected the bank to report £7.8 billion in total net income of insurance claims and net operating income of £6.9 billion. Profit before tax was expected to be around £1.85 billion. Barclays PLC (NYSE:BCS) (LON:BARC)’s investment bank was expected to report total income of about £3.3 billion, net operating income of £3.2 billion and pretax profits of £.9 billion.

At the moment of this writing, shares of Barclays PLC (NYSE:BCS) (LON:BARC) were down 2.18 percent at the New York Stock Exchange, erasing Tuesday’s gains.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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