Barclays profit drops on loss from asset disposals

Barclays Plc said profit fell by more than half in the second quarter as the bank posted a 1.1 billion-pound ($1.4 billion) pretax loss from the unit that houses the businesses and assets its trying to sell or wind down.

Pretax profit, excluding notable items, fell to 763 million pounds ($1.01 billion) from 1.62 billion pounds a year ago, the lender said in a statement Friday. That missed the 985 million-pound average estimate of six analysts compiled by Bloomberg.

“Non-core rundown — the key to unlocking the full earnings power of that core — has good momentum, and we remain committed to closing the unit in 2017,” Chief Executive Officer Jes Staley, 59, said in the statement.

Staley’s nascent turnaround effort at Barclays was dealt a blow by Britain’s vote in June to leave the European Union, just months after he decided to retreat from Asia and Africa and refocus on the U.K. to revive profitability. With the country now heading for a recession and questions over whether the investment bank will be allowed to continue doing business across Europe from London, analysts have slashed the firm’s earnings outlook and called for deeper cost cuts.

Barclays also reported credit impairment charges at the investment bank increased by a third largely due to the oil and gas sector.

The stock has fallen 34 percent since Staley took over in December, extending a two-year slump that’s left the bank trading at less than half the book value of its assets.

In addition to Brexit, the shares have been depressed by the bank’s surprise decision in March to cut its dividend in half to support its capital position amid its restructuring. Staley is selling down its century-old African business, pulling the investment bank out of nine countries and has eliminated more than 10,000 jobs, while trying to divest about 50 billion pounds of toxic and unwanted assets.

Staley and Chairman John McFarlane, 69, are trying to convince investors of the long-term advantage of keeping a transatlantic investment bank, which generated lower investment returns than its consumer and credit card business in the first quarter.