Barclays Shares Fall 6% As Profits Disappoints

In its third quarter results, the firm said pre-tax profit at the investment banking arm was £652m, down from £1.2bn in the second quarter.

Total pre-tax profit was £1.1bn, 32% higher than last year, as a result of lower operating expenses. However, this figure came in below analysts' expectations of £1.4bn. 

Meanwhile, profits over the last nine months were up 19% to £3.4bn. 

Barclays launches impact fund of funds

However, despite the positive numbers, investors were disappointed with the results, and selling activity sent shares in the firm tumbling 6.4% in morning trading to 184.5p.

Mike van Dulken, head of research at Accendo Markets, commented: "Barclays may have reported Q3 profits of more than 40%, helped by lower litigation and provisions but it has nonetheless disappointed.

"The likely reason for the share price drop is the pre-tax profit of 'just' £1.1bn. This was well below consensus expectations of £1.4bn, helping send the shares back sharply."

Additionally, the group also announced plans to ringfence its UK bank, in line with regulatory requirements, which it hopes to have established by April 2018. 

The stock is held by several UK equity funds, such as £114m Fidelity UK Opportunities, £168m Old Mutual UK Equity Income and £733m Royal London UK Opportunities. 

FCA investigates Barclays CEO in whistleblowing case

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The UK business has largely tracked sideways, while in the international business there has been a big dip in revenues from trading activities in the investment bank.

"After making some good progress, Barclays appears to be stalling somewhat and it is now touch and go whether the bank will break even in 2017. With the bank's restructuring complete, Jes Staley will want to recover some momentum as we move forward into next year."