Barclays' profits have been cut in half
Barclays' non-core business sustained losses of £1.9 billion, the main factor behind the big drop.
The profit figure excludes notable items, and comes in lower than the £985 million expected by analysts in a Bloomberg survey.
Deals with education, social housing, and local authority clients were repriced to reflect their fair value, causing losses of £424 million, while the bank's French business, which Barclays is in the process of selling, took a £372 million hit.
The non-core business includes troubled assets which Barclays is trying to run-down and sell.
CEO Jes Staley stopped short of blaming Brexit but said the vote to leave the European Union created "uncertainty":
"We remain confident that it is the right plan for Barclays, and see no reason to adjust it, or the pace of delivery, in light of the vote by the UK last month to exit the EU."
"Given the inherent diversification of our business model, coupled with a longstanding conservative approach to risk, Barclays is well positioned to weather any potential economic consequences of that decision. We are very much open for business, and fully committed to supporting our customers and clients, and the real economy, through this period of uncertainty."
Staley's comments are in stark contrast to those of Lloyds CEO Antonio Horta-Osorio, who on Thursday warned that "a deceleration of growth seems likely" for the UK economy as the bank announced 3,000 job cuts and 200 branch closures.
Here are some of the other headline figures from Barclays second quarter results:
- Oil and gas credit hit: "Credit impairment charges increased £152m to £931m primarily driven by the impairment of a number of single name exposures, largely in respect of counterparties in the oil and gas sector."
- Pound depreciation increased both income and costs: "Group income statement performance was materially impacted by the appreciation of average USD and EUR against GBP, positively benefiting income and adversely affecting impairment and operating expenses."
"Not only does the decision by Britons to exit the EU cloud the business environment for the foreseeable future with a heightened level of uncertainty, the likely response from the Bank of England in further easing monetary policy will provide an additional headwind to all banks as operating margins are squeezed further," David Cheetham, market analyst at XTB.com, said in an email.