Profits at Barclays increased dramatically in the last year, although the bank continues to pay out large amounts of payment protection insurance (PPI) compensation.
In its annual statement published today, the bank said that by the end of 2016 it had paid out a cumulative £6.46 billion in compensation to customers who had been mis-sold the product.
A further £1 billion was set aside during the year meaning it now has a provision of £1.98 billion for future claims.
The volume of claims has, however, decreased by 8% compared to 2015.
Pre-tax profits at the bank grew substantially to £3.2 billion during 2016, up from £1.1 billion the previous year. It continues to restructure the bank to dispose of its non-core assets, including some of its business in Africa.
In the UK, the number of Barclays branches fell from 1,362 to 1,305 by the end of 2016.
James Staley, group chief executive officer at Barclays, says: “We are now just months away from completing the restructuring of Barclays, and I am more optimistic than ever for our prospects in 2017, and beyond.”
Laith Khalaf, senior analyst at Hargreaves Lansdown, says: “Lower PPI costs and currency tailwinds have helped boost profits at Barclays, while good progress has been made in winding down the bad bank that has been holding the group back.
“Overall Barclays is in better shape than it was, and the accelerated timetable for the run-down of its non-core assets will be received positively by the market. However once the bad bank is consigned to the history books, there will be nothing for management to hide behind if the core business is not delivering.”