British banking giant Barclays made a net loss of £1.9 billion last year as continuing PPI payments and the impact of the USA’s new tax rules hit the bank’s bottom line.
Barclays took a £2.5 billion hit from the sale of its African business and suffered a “one-off net tax charge of £901 million” due to Donald Trump’s new US tax plan, the bank said in its results statement, released on Thursday morning.
The provision of cash for payments surrounding historically mis-sold payment protection insurance (PPI) continued to impact Barclays too, PPI payments costing it £700 million. That was down from £1 billion in 2016.
Barclays’ attributable loss compares with a £1.6 billion profit over the course of 2016. While Barclays made an attributable loss on almost £2 billion, pre-tax profits rose strongly, increasing by 10% from the previous year to £3.5 billion.
“2017 was a year of considerable strategic progress for Barclays,” Barclays’ CEO Jes Staley said in a statement released with the results.
“The sell-down of our shareholding in Barclays Africa, closure of our Non-Core unit, the establishment of our Service Company, and the creation of our UK ringfenced bank, mean that, in terms of size and structure, we are now the diversified Transatlantic Consumer and Wholesale bank we set out in our strategy in March 2016.”
Barclays sold off several portions of its African operation last year, and now owns only 15% of the unit, down from around 60% in March 2016.
Many businesses are being negatively hit by one-off charges in relation to Trump’s tax changes as they make adjustments for the new rules. Oil and gas giant BP said it expects a $1.5 billion hit this year, for example.
Shares in the bank reacted positively to the results, with investors likely focusing on the pre-tax profit figure. Barclays’ stock price rose around 3% as markets opened.