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Barclays eyes more cost cuts as Q2 profit falls YOY

Barclays PLC said it will focus on reducing costs in the second half after it faced a "challenging income environment" in the first half, as it posted a year-over-year drop in second-quarter profit.

The British banking group reported second-quarter attributable profit of £1.03 billion, down from £1.28 billion a year earlier. Barclays expects to reduce costs for 2019 to below the £13.6 billion low end of its previous cost guidance.

EPS for the period was 6.0 pence, compared to 7.5 pence a year ago. Return on average tangible shareholders' equity was 9.0%, down from 11.8% in the second quarter of 2018.

Net interest income rose year over year to £2.36 billion from £2.19 billion, while net fee, commission and other income fell to £3.18 billion from £3.39 billion.

Credit impairment charges and other provisions amounted to £480 million in the second quarter, up from £283 million a year ago. Litigation and conduct charges fell on a yearly basis to £53 million from £81 million.

Total operating expenses reached £3.55 billion, up from £3.39 billion a year ago.

For the first half, the British banking group's unaudited profit attributable to equity holders of the parent increased year over year to £2.07 billion from £561 million. Barclays said the result reflected the nonoccurence of litigation and conduct charges of £2.0 billion mainly related to the residential mortgage-backed securities settlement and payment protection insurance.

Barclays' common equity Tier 1 ratio stood at 13.4% at June 30, compared to 13.2% at the end of 2018 and 13.0% a year ago.

The bank declared a dividend of 3.0 pence per share for the first half, up from 2.5 pence per share a year earlier, noting that the half-year dividend is expected to represent around one-third of the total dividend for the year. The dividend will be paid Sept. 23 to shareholders on the register Aug. 9.