UPDATE:Barclays Sees 13%-15% Avg Return On Equity In Retail Op

30th Jun 2010 14:37

(Adds detail.) By Patricia Kowsmann Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Barclays PLC (BCS) said Wednesday that it expects its global retail banking operations to deliver an average return on equity in the period 2010 through 2013 of 13% to 15%, as the bank continues to look to grow the business. The U.K. bank also said in a statement that it is targeting the division to post a 5% growth in income a year in that period, report broadly stable net interest margins and control costs. "These targets, which are subject to current macro-economic planning assumptions, are designed to deliver strong compound annual profit growth over the period 2010 to 2013 for the division in aggregate," it said. The bank recently restructured its divisions, and its global retail banking operations now comprise of retail banking in the U.K., Western Europe and Africa, in addition to Barclaycard. In the first quarter of the year, the global retail banking division reported a pretax profit of GBP403 million. In contrast, its other division--corporate and investment banking, and wealth management--posted a pretax profit of GBP1.47 billion. In a presentation to investors, Barclays said it will continue to seek to expand in countries hard hit by sovereign-debt problems, including Spain and Portugal. Spain is the bank's largest market in Western Europe, while Portugal and Italy are the fastest growing, Leo Salom, chief executive for Western Europe retail banking, said. He added the bank wants to become a top five retail bank in Portugal and Italy, without providing a timeline. In Italy, it wants to become a top five bank in 10 key cities, mainly in the affluent north. Salom said the bank is confident about its businesses in the countries, as impairments continue to fall, following a tightening in credit criteria since the financial crisis. In the short-term, however, margins will be hurt by the current troubles in the region, he added. Barclays, which has gone through the financial crisis without government help, has said it wants to generate half of its global retail and commercial banking business profit from international operations, up from 18% in the first half of 2009. Late last year, the bank bought the credit card business of Citigroup Inc. (C) in Portugal. It also bid for branches up for sale in Italy, although it didn't end up buying them. Currently, Barclays retail banking is present in 21 countries. -By Patricia Kowsmann, Dow Jones Newswires. Tel +44(0)207-842-9295, [email protected] (END) Dow Jones Newswires June 30, 2010 09:37 ET (13:37 GMT)