Barclays’ profits increased 23% when trading resumed
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Barclays’ profits rose 23% to a better-than-expected £1.6bn in the third quarter, as the bank was boosted by high interest rates and increased trading activity.
Analysts had expected the British bank to report an attributable profit of £1.3 billion.
Barclays on Thursday reported net interest income of £1.7 billion – slightly above forecasts of £1.6 billion – and raised its guidance for this year from around £11 billion to more than £11 billion. board. It also raised guidance for net interest income from UK domestic banks to £6.5 billion from £6.3 billion.
Barclays’ investment bank, which is a focus for shareholders, reported earnings of 2.9 billion pounds, up 6% from a year earlier, as share trading and new trading activity picked up. boosting fees and underwriting income this year.
The results were in line with Barclays’ Wall Street rivals, where a return to mergers and acquisitions activity after a two-year hiatus and volatility in global stock markets increased in August. investment banking.
Barclays CEO CS Venkatakrishnan said he expected M&A activity to continue to recover as inflation eases and the US and UK economies avoid recession.
However, Venkatakrishnan said the US election results could change the macroeconomic picture and affect trading.
“We have to see who is coming,” he said. We have to see what economic and trade officials they bring in and what their policies are, and that could obviously cause some volatility.”
Barclays co-heads of investment banking Taylor Wright and Cathal Deasy this month laid out how they plan to boost profits for the business by increasing their focus on equity capital markets and advisory work.
Investment banking fees and underwriting revenue increased 58% over the same period last year. But the increase was mainly driven by a rise in debt capital markets fees, fueled by leveraged financing activity.
Barclays’ revenue from equity trading and traditional strength in fixed income rose 3% year-on-year to £675m and £1.15bn respectively.
The investment bank’s trading arm could benefit from the knock-on effect of the US election on markets, Venkatakrishnan added. “In volatile times If we can serve our customers in a risk-managed way then that’s good for our customers and good for the bank.”
Barclays also said it suffered an 85 million pound fair value loss on leveraged finance lending in the third quarter at its international corporate bank, where revenue fell 12%.
At UK retail banking, Barclays set aside £82 million for bad debts, down from £267 million in the same period last year, due to “low card delinquencies in the UK, high-quality mortgage loan portfolio and improved macroeconomic outlook.”
The lender said Acquired the majority of Tesco’s banks will come into effect in November and help boost capital alongside retail loan book sales in Germany and Italy this year.
