Barclays has reported a 21% drop in pre-tax profits to £2.06 billion in the firs half of 2016, blaming a harsh economic environment.

It also set aside a further £400m for miss-selling of payment protection insurance (PPI).

The average LTV of its mortgage portfolio was 47% in the first six months of the year, compared to 51% over the same period last year. There was a small rise in the average LTV of its new mortgage lending from 62% to 63%. 

Graham Spooner, investment research analyst at The Share Centre, said: “Shares in Barclays were up 5% in early trading this morning despite the banking giant stating that net profit fell to £1.1bn as a result of the company selling off parts of its business. The group also reported a 21% dip in H1 pre-tax profits as the harsh economic environment took its toll on earnings.

“Barclays CEO Jes Staley said in the update that he was confident Brexit won’t hit its restructuring time table, although warned of increased risk in the shorter-term as a result uncertainty in the UK and Europe.  Staley stated that the picture in Q2 was one of ‘strong and accelerating progress against our strategy’.

“Long suffering investors have seen the share price fall back to levels last seen in 2011 and any recovery is likely to be slow. Indeed although the shares were up 5% in early trading, they are still down by around 30% year to date.”