The part of the UK-listed bank that covers its wealth management business reported a significant profit rise last year.

The personal and corporate banking arm of UK-listed Barclays, the segment of the bank that includes its wealth and investment management business, said today that pre-tax profit for 2014 was £2.885 billion ($4.44 billion), rising 29 per cent year-on-year.

Attributable profit for the year ended 31 December was £2.058 billion, the banking group said, a gain of 22 per cent. Net interest income was £6.298 billion, up 7 per cent. Net fee and commission income fell 10 per cent on the year to £2.443 billion, while other income fell 19 per cent to £87 million, Barclays said in a statement.

The cost/income ratio of personal and corporate banking was 62 per cent at the end of last year, narrowing from 68 per cent at the end of 2013.  

Since last year, when Barclays changed its structure to create just four business lines, the financial performance of the wealth and investment segment of the bank is no longer disclosed. The bank did say, however, that in its analysis of total income, “wealth” came in at £1.077 billion, a 1 per cent rise from 2013; in terms of customer deposits, the wealth portion fell to £31.2 billion from £36.9 billion. The modest rise in wealth income came from growth in the UK business offset by client and market exits as the US and European businesses were reorganised, and because of a dip in fee income, it said.

“The Wealth and Investment Management business has made significant progress on its transformation journey and we remain focused on positioning the business for sustainable long-term growth in target markets around the world. We continue to invest in streamlining processes, aligning global platforms and delivering market leading digital solutions to enhance the client experience,” Akshaya Bhargava, chief executive of wealth and investment management, said.

Across the whole of Barclays’ business lines, the bank said it logged an attributable loss for 2014 of £174 million, against a profit in 2013 of £540 million. Pre-tax profit last year was £2.256 billion, a fall on the year of 21 per cent. The banking group had a common equity tier one ratio at the end of last year of 10.3 per cent, up from 9.1 per cent.

Provisions

Results for the group were, analysts said, somewhat dampened by news of further provisions set aside for payment protection insurance provisions (against mis-selling claims of PPI), of £200 million, and an additional £750 million set aside for a probe into foreign exchange market misconduct.

“We currently list Barclays as a ‘hold’ for investors favourable of the banking sector. Long suffering investors will focus on the CEOs ongoing restructuring, however the sector is still under a cloud and with the uncertainty over the investment banking division we would recommend that there are potentially better opportunities elsewhere,” Graham Spooner, investment research analyst at The Share Centre, a UK group, said in a note.

“Barclays is continuing to restructure and the CEO has shrunk Barclays investment arm in order to move away from its dependence on investment banking. The bank is also continuing to make progress to achieve its 2016 targets, however investors should note progress is likely to be slow,” Spooner added.