Barclays’s pre-tax profit tripled to £3.2 billion in 2016

Company - Mohit Shah - Feb 23,2017

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barclays pre tax profit tripled to 32billion in 2016

Revenue hiked 7 per cent to £22bn and capital ratio rose 12.4 percent

London-based Barclays registered a surprise increase in its capital ratio, an important measure of financial strength on 23 Feb. Barclays’s capital ratio rose 12.4 percent against the expectation of 11.8 percent. The increased capital ratio will help the company to cope up with the legal matters and global market fluctuations.

This increment is the result of its rising profits and effective cost cutting.

Full-year profit before tax increased from £1.14 billion in 2015 to £3.2 billion in 2016, falling short of its own prediction of £3.97 billion. However, the growth rate is an impressive 280 percent. In 2014, the pre-tax profit was £4.4billion.

Two units of Barclays, Barclays UK and Barclays International, are doing particularly well.

The Company continued to cut costs, which dropped to £13.4bn in 2016 from £15bn in 2015. The company also cut down the amount it paid to redress the customers from £2.7bn in 2015 to £1bn in 2016. Revenue hiked 7 per cent to £22bn and also the Shares of the bank rose around 2 percent on 23 Feb.

The company has decided to close its non-core unit six months before schedule and also reached an agreement with its African unit on the terms of their separation which may require it to pay its African unit 12.8 billion rand ($988 million) to finance investments required to separate them. Barclays also announced the end of the reconstruction, which began a year ago.

Barclays is currently facing a suit filed by the U.S. Department of Justice on fraud charges in the sale of mortgage-backed securities during the 2008-09 financial crisis. Barclays is the only among major bank, who chose to contest its case when all other rivals have settled.