Barclays profits amid UK economic 'uncertainty' in UK

Barclays has reported a profit of £3.5bn for 2018, unchanged on the previous year.

The bank also announced a provision of £150m for "anticipated economic uncertainty" related to Brexit.

If the economy suffers after the UK's departure from the EU, the extra allowance will help Barclays cover costs such as rising bad debts.

The bank's chief executive, Jes Staley, said 2018 had been a "very significant" year, with several issues resolved.

Last year, it took charges of £2.2bn to cover legal issues and fines, including a large settlement with US regulators and, in the UK, compensation over PPI.

Barclays confirmed that it will pay a dividend of 6.5p this year.

The company's management is under pressure from US-based financier Edward Bramson to raise its performance.

Mr Bramson owns a 5.5% stake and wants to take a seat on the board. In particular, he thinks Barclays should scale back its investment bank.

Last year, the investment bank reported a 15% increase in profits to £2.6bn.

In a statement accompanying the latest results, Mr Staley said his plans would be good for shareholders.

He said the bank planned to return a greater proportion of its earnings to shareholders, including buying back shares in the company, a move which traditionally supports the share price.

Barclays is not the only bank to warn about the possible negative impact of Brexit on the economy.

Last week, RBS chief Ross McEwan said the UK economy faced "a heightened level of uncertainty related to ongoing Brexit negotiations".

He told the BBC: "Larger corporations are pausing on their investments. And this cannot be good for the economy long-term, because those large corporations then employ smaller businesses and individuals."

At the end of last year, HSBC also raised its provision for economic uncertainty in the UK by £165m to £410m.

Commenting on the provision made by Barclays, Laith Khalaf, from stockbrokers Hargreaves Lansdown said: "As with all the UK banks, Brexit casts a shadow over valuations, despite improving fundamentals.

"Indeed Brexit uncertainty has prompted Barclays to put aside £150 million in case of deteriorating economic conditions in the UK. That could prove to be insufficient or over-cautious, depending on proceedings in Westminster and Brussels. Therein lies the puzzle of the UK banking sector which explains lowly share prices; like Schrödinger's cat, no-one's quite sure what state it's in."