Pretax profit at Barclays tumbled 21 per cent to £2.06 billion (€2.45 billion) in the first half of the year.
The lender also booked a £400 million charge for payment protection insurance (PPI) in the second quarter, taking its total provisions to £7.8 billion.
And the bank warned that Britain's decision to quit the European Union could have a detrimental effect on the lender.
Recession risk
It said the increased risk of recession with lower growth, higher unemployment and falling UK house prices “would likely negatively impact a number of Barclays’ portfolios”, most notably its mortgage offering.
Total income at Barclays was down 9 per cent to £11 billion (€13 billion) in the six months to the end of June. Net profit for the second quarter came in at £803 million compared with £1.2 billion last year.
Chief executive Jes Staley said: "This has been a quarter of very encouraging progress against our strategy. Our core businesses, Barclays UK and Barclays Corporate & International, continue to thrive."
Barclays also warned that if Brexit negotiations end with the UK’s financial sector losing “passporting” rights, it would require the bank to make “alternative licensing arrangements in EU jurisdictions” where it operates.
Uncertainty
“The result of the referendum means that the long-term nature of the UK’s relationship with the EU is unclear and there is uncertainty as to the nature and timing of any agreement with the EU,” the bank said.
“In the interim, there is a risk of uncertainty for both the UK and the EU, which could adversely affect the economy of the UK and the other economies in which we operate.”
Industry concerns following the Brexit vote have centred on the UK’s membership of the single market and whether it would continue to have access to the bank passporting system.
Banks and financial firms wanting to trade with a country in the European Economic Area must apply for a passport, which allows them to sell their products to any country within the area.
However, the European Central Bank has warned that Britain would not be able to access the passporting system without remaining a member of the single market and abiding by its rules, which includes the free movement of people. – (PA)
