For Barclays, Brexit is 'no reason' to be blown off course

In CIB, which Staley has overseen since the March departure of divisional head Tom King, revenues for the three months to June 30 fell to £2.6 billion from £3.3 billion a year earlier, according to a results presentation published on July 29, while pre-tax profits fell 44% to £909 million.

Despite this, the bank saw revenue growth in pockets of both its investment banking and sales and trading businesses.

In markets, credit revenues surged 23% from a year ago to £269 million, which the bank attributed to “improved market share and client flows”. Macro revenues were up 5% at £612 million due to “higher client activity in both rates and currency products”.

But those rises contrasted with a 31% drop in equities revenues, where the bank said a “strong Americas performance” was “more than offset by lower client activity in Asia” as well as the “simplification” of parts of the bank’s business in Europe, the Middle East and Africa.

That left total markets revenues of £1.3 billion down 7%.

Meanwhile, a “strong quarter for advisory and debt underwriting” helped to push banking fees from corporate finance and advisory work to £622 million, up 7%.

That is the best quarterly result from that business since the second quarter of 2014, according to analysis of past results restated by Barclays in April to reflect Staley’s creation of a new corporate and international division housing the CIB and other businesses.

Revenue falls in corporate lending and transactional banking took total banking revenues down 4% from a year earlier to £1.3 billion.

At group level, quarterly profits from Barclays’ core businesses rose 8% to £1.5 billion, although group profits were hit by a loss at the non-core division of £887 million.

Staley said the plan remains to strengthen the group’s core businesses, close non-core ones“as fast as possible” and continue reducing Barclays’ stake in Barclays Africa.

He said: “Taken together, the picture in the second quarter is one of strong and accelerating progress against our strategy. We remain confident that it is the right plan for Barclays, and see no reason to adjust it, or the pace of delivery, in light of the vote by the UK last month to exit the EU.”

However, the bank noted in its report that the referendum result creates new risks for its business.

These include market volatility; the increased risk of a UK recession, which could impact some of the bank’s portfolios; the possible loss of passporting rights into other EU countries; and uncertainty as to whether the bank will keep access to the “EU talent pool” through freedom of movement rules.

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