Bank sees a slight increase in profit, beating forecasts
Barclays has released its Q3 financial results, revealing a slight increase in profit that beats previous forecasts.
The UK domiciled bank made £2bn profit before tax, up from £1.9bn in the last quarter. It also generated a return on tangible equity (RoTE) of 12.5% and an earnings per share (EpS) of 9.4 pence.
This, according to group chief executive C.S. Venkatakrishnan, has poised the bank to deliver its full year statutory RoTE target of above 10%.
“Barclays has had a strong third quarter of financial performance, building on our performance in the first half of the year,” he said, addressing investors and analysts.
Venkatakrishnan attributed the Barclays’ Q3 performance to strong income momentum and returns across all of its three operating businesses.
The bank’s FICC (Fixed Income Clearing Corporation) performance was particularly strong as income rose 63% in US dollars. Its US cards balances also saw growth from a recovery in spending and a partnership with GAP. In the UK, the bank was “well positioned” for rising interest rates and was able to lock in higher yields, thanks to a growing contribution from its structural hedge.
“Group income growth was 17% in the third quarter year on year, excluding the impact from the over-issuance of securities,” Venkatakrishnan said. Despite the bank’s strong Q3 performance, he also pointed to global macroeconomic challenges that necessitate a cautious approach.
While Barclays’ US credit portfolio had grown, its UK counterpart remained “some 40% below pre-pandemic levels.” In fact, September data on debit and credit card spending in the UK had shown “a slight fall in consumer confidence.”
“While I am pleased with the results, I am very conscious that we live in unusually uncertain times,” Venkatakrishnan said. “This drives our conservative approach to managing our balance sheet and provision levels, and our careful stance towards the expected deterioration in the global economy.”