Barclays reported a 2% drop in profits to £5.4 billion, and announced it intends to halve the dividend for this year and next. The bank will pay a final dividend for 2015 which brings the full year total to 6.5p but for 2016 and 2017 this will be reduced to 3p in each year.

Barclays also announced it will be selling down its African banking operations, and splitting the bank into two divisions by 2019 to ring-fence the UK bank in compliance with UK prudential regulations.

Laith Khalaf, Senior Analyst, Hargreaves Lansdown:

‘Cleaning is very much still in progress at Barclays, as the group seeks to focus its business around its core strengths and mop up the grisly legacy bits that are still weighing the bank down.

This philosophy is very much in vogue in the banking sector, where the sins of the past continue to loom large. To that end Barclays put aside £2.2 billion to cover PPI claims, and booked a £1.5 billion loss from the non-core businesses it is downsizing.

Barclays has decided to jettison its African business, which will free up capital and get rid of an unwanted distraction as the bank continues its clean-up operations. The bank is also cutting the dividend in half for this year and next, and accelerating the run-off of its non-core assets.

The new boss Jes Staley is clearly taking a big broom to Barclays’ operations in a bid to dramtically simplify the group. When the dust has cleared, the bank should have two high quality financial services divisions, and the potential to offer investors a decent dividend, but it’s going to take some elbow grease to get there.’