Source - SMW
Barclays posts group pre-tax profits of  £3,448m for the first nine months of the year - up 19% on last time.

The group said the result was driven by  a £932m reduction in operating expenses, primarily reflecting lower litigation and conduct and non-core costs. 

Income reduced £405m due to the non-recurrence of the £615m gain on disposal of Barclays' share of Visa Europe Limited in 2016.

The group posted an attributable loss of £628m (Q316 YTD: profit of £1,524m) which included a loss after tax in respect of the discontinued operation of £2,195m reflecting an impairment of Barclays' holding in BAGL of £1,090m and a loss on the sale of 33.7% of BAGL's issued share capital of £1,435m, primarily due to recycling of currency translation reserve losses to the income statement.

The group also announced proposed changes to the structure of the group due to ring-fencing reforms brought in by the Government to strengthen the UK financial system following the financial crisis that began in 2008.

Barclays said it intended to satisfy this requirement by setting up a ring-fenced bank, Barclays Bank UK PLC, which would be separate from Barclays Bank PLC. 

It said the two entities would operate alongside, but independently from, one another as part of the Barclays Group under Barclays PLC.

Commenting on the results, group chief executive James E Staley said: '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.

'Having closed the Non-Core unit, and sold our controlling interest in Barclays Africa in June, we now have the end state Transatlantic Consumer and Wholesale Bank - in Barclays UK and Barclays International - which we set out to build in March of 2016.

'With Returns on Tangible Equity of 9.4% and 10.0% respectively, both Barclays UK and Barclays International have contributed to a Group profit before tax for the first nine months of the year which is up 19% to £3,448m. 

'The Group's RoTE, excluding the impact of the sale of our stake in Barclays Africa Group, as well as charges taken for Payment Protection Insurance earlier in the year, was 7.1%.

'The third quarter was clearly a difficult one for our Markets business within BI. A lack of volume and volatility in FICC hit Markets revenues hard across the industry, and we were no exception to this trend. 

'We did however see an improvement in profitability in BUK, and a good underlying return from our Consumer, Cards and Payments business, which partially offset the under-performance in Markets.

'The completion of our restructuring, and the strength of our capital base today - with our CET1 ratio standing at 13.3% pro forma after BAGL regulatory deconsolidation - means we can now turn our full attention towards what matters most to our shareholders: improving Group returns.

'We now have high confidence in our capacity to assert when Barclays will start to deliver the economic performance which we know this Group is capable of, and therefore today we are announcing new targets for 2019 and 2020 for Barclays.

'First, we have set a target of achieving a Group RoTE of greater than 9% in 2019.

'Second, we have stated that we will improve that Group RoTE again in 2020, to be greater than 10%.

'Third, we have set a firm target range for costs in 2019 to be between 13.6 and 13.9 billion pounds, excluding litigation and conduct charges, and depending on proactive investment choices we make in that year.   

'The returns targets are based on an assumption of running the business within our end state capital range of around 13% CET1.   

'Our experience over the past couple of years, and the multiple opportunities for revenue growth within our diversified Group, confirms for us that these targets are attainable. 

'We have strong plans in place to achieve them, including self-funded investment to realise further efficiencies and to grow revenue.

'Whilst working to put our remaining conduct issues behind us, we remain focused as a management team on being in a position to distribute the returns that these plans will generate, on a sustainable basis, to shareholders. 

'Accordingly, at the full year results announcement early next year we will provide an updated capital management policy for the Group.'