Barclays’ £2.2bn profits beat City expectations

A stronger than anticipated performance from Barclays’ British high street business and lower than expected charges for bad loans helped the bank to surpass City expectations for the third quarter.
The FTSE 100 lender said pre-tax profits at the group climbed by 18 per cent year-on-year to £2.2 billion in the three months to the end of September, beating the £2 billion that had been expected by analysts.
Profits at its UK retail division climbed by more than a fifth to £924 million, bettering the £729 million that analysts had pencilled in for the quarter. Bad loan impairments across the group of £374 million were also lower than the £452 million that had been forecast.
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In a further fillip to shareholders, Barclays also bolstered its guidance for its full-year performance, saying it now expected to generate annual net interest income excluding its investment banking division of “greater than £11 billion”. It had previously told investors to expect about £11 billion.
Barclays is one of Britain’s biggest lenders and also runs one of Europe’s largest investment banks, one of the few that is able to go toe to toe with the giants of Wall Street. However, years of lacklustre share price performance has forced C.S. Venkatakrishnan, its chief executive, to revamp the group’s strategy.
His three-year plan, which was unveiled in February, involves shifting the centre of gravity of Barclays away from its capital intensive but volatile investment bank, growing its consumer and corporate business in the UK and returning at least £10 billion to investors by 2026. It is also aiming to generate a return on tangible equity (RoTE), a key measure of profitability, of more than 12 per cent.
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“We continue to be focused on disciplined execution of our three year plan and are encouraged with progress to date,” the Barclays boss, who is known as Venkat, said. “Whilst there is more work to do, the group is on track to achieve its target of greater than 12 per cent RoTE in 2026.”
Pre-tax profits at its investment banking business edged up 2 per cent to £892 million, just shy of the £902 million forecast by analysts.