London - AFP
British bank Barclays on Thursday logged soaring third-quarter net profits, buoyed by the absence of restructuring and mis-selling charges -- and by improving UK profitability despite looming Brexit.
However, Barclays' shares tanked more than six percent on news of struggling trade at the group's investment banking division.
Earnings after taxation jumped to £583 million ($770 million, 653 million euros) in the three months to the end of September, compared with £414 million a year earlier, Barclays said in a statement. Pre-tax earnings leapt by almost a third to £1.1 billion.
British unit Barclays UK logged a net profit of £423 million, despite uncertainty surrounding the UK's exit from the European Union. That contrasted sharply with a net loss of £163 million a year earlier.
"The third quarter of 2017 was particularly significant for Barclays as it was the first for many years in which we have not been in some state of restructuring," said chief executive, Jes Staley.
He added: "We did however see an improvement in profitability in Barclays UK, and a good underlying return from our consumer, cards and payments business, which partially offset the under-performance in markets."
Barclays has now offloaded all non-core activities as part of its global strategic re-think, as it focuses on main markets Britain and the United States.
On a gloomier note, the group warned Thursday that investment banking division Barclays International had endured a "difficult" time and a 42-percent slump in net profit.
"The third quarter was clearly a difficult one for our markets business within Barclays International," Staley said.
"A lack of volume and volatility in fixed income, currencies and commodities hit markets revenues hard across the industry, and we were no exception to this trend."
- Shares slide -
The disappointing news sent Barclays' share price tumbling 5.9 percent to 185.35 pence at about 1200 GMT on London's rising FTSE 100 index.
"Weak trading performance in its investment bank has held the group back, with low volumes in FICC (fixed income, currencies and commodities) continuing to blight the division," noted XTB analyst, David Cheetham.
The lender also unveiled proposals to ring-fence retail banking operations in order to help it withstand another global financial crisis.
The move will help it meet regulatory rules that demand all British banks with more than £25 billion of UK deposits section off retail operations from riskier investment banking activities by 2019.
"Barclays intends to satisfy this requirement by setting up a ring-fenced bank, Barclays Bank UK plc, which will be separate from Barclays Bank plc," the group added in a separate statement.
"The two entities will operate alongside, but independently from, one another as part of the Barclays Group under Barclays PLC."
The quarterly results were also lifted by the absence of further charges against the mis-selling of payment protection insurance (PPI) in a long-running scandal which has blighted the sector.
Barclays had already set aside £700 million in the first six months of this year, taking its total PPI compensation provision to £9.1 billion.