Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

Barclays beats expectations, but beware a sting in the tail

Following on from yesterday’s results from Lloyds Banking Group, it was Barclays turn to announce a significant increase in profits for the year. A tripling of profits to £3.2bn was driven primarily by an improvement in investment banking revenues, as the increased volatility in the second half of 2016 helped boost revenues, particularly in Q4.

Revenues in the international bank rose by 9%, while its UK business also saw an improvement, no doubt helped by the resilience of the UK economy, as profits improved to £1.74bn.

The bank was also helped by lower litigation and misconduct charges, reduced to £1.36bn, though the bank has yet to settle with US authorities after rejecting an offer to settle a mis-selling claim for mortgage backed securities at the end of last year, which could provide a sting in the tail later this year. This is because Deutsche and Credit Suisse settled for $7.2bn and $5.3bn respectively, which might suggest that any potential future settlement is likely to be of a similarly high amount.

US authorities instituted legal proceedings at the end of last year for $31bn worth of mortgage loans between 2005 and 2007 that turned out to be “catastrophic failures”. The US is looking to claim a sum commensurate with the sums it levied against Deutsche and Credit Suisse, while Barclays is looking at an amount of about half that.

CEO Jes Staley stated that the bank remains on track to complete its restructuring of its non-core assets by the middle of this year, ahead of schedule.

CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person