Barclays profits soar despite misconduct costs as bank cuts spending

Barclays reported an 11% jump in adjusted pre-tax profit to £3.73bn over the half year to 30 June 2015 despite high costs related to legal settlements. Profit on a statutory basis increased by 25% to £3.11bn.

The bank's net income was down by 3%, largely due to its non-core division shrinking down by 92%, which is part of the bank's strategic plans to trim non-core assets down to £20bn, as non-core trading income declined. "The results reported today represent continued good progress for the business," executive chairman John McFarlane commented.

"Group profits are up on both an adjusted and statutory basis, and our core franchises have performed well. Non-Core rundown continues, costs remain under control, and we continue to seek to put conduct issues behind us," he added. The company managed to cut down operating expenses by 7% to £8.26bn (€11.67bn, $12.89bn) and is expected to continue conducting cuts to increase margins.

In the first quarter of 2015, Barclays set aside £800m to settle several different misconduct issues, causing the bank to report that profits fell by more than a quarter. The results come only three weeks after the bank announced it sacked its chief executive Anthony Jenkins on 8 July, which followed the resignation of deputy chairman Michael Rake.

In the results, McFarlane underlined the importance of the transformation the bank is undergoing. He stated: "There is a lot we can do to accelerate our progress and the work has already begun." The bank did not lift its profit guidance but McFarlane said that he expects Barclays to easily reach the targets set at the beginning of the financial year.