Real Estate

Barclays doubles quarterly profit to £2bn


Barclays almost doubled its third-quarter profit to £2bn as it benefited from strong mortgage lending in the UK and a boom in investment banking.

The British bank’s profit before tax rose from £1.1bn a year ago, taking its year-to-date profit to an all-time high of £6.9bn. Barclays said a consumer recovery had contributed to the stronger performance, as well as higher investment banking fees.

Barclays has released bad debt provisions of £622m so far this year as the economy recovers from the pandemic and it reckons it will need less to cover bad debts. This is in stark contrast with this time last year when Barclays had set aside £4.3bn to cover bad debts, but government support measures propped up businesses.

Jes Staley, the chief executive, said: “While the corporate and investment bank performance continues to be an area of strength for the group, we are also seeing evidence of a consumer recovery and the early signs of a more favourable rate environment.”

Barclays said it was “well positioned for a rising rate environment”, as expectations mount that inflation pressures will prompt the Bank of England to raise interest rates. Personal banking income in the UK climbed 10% to £2.9bn in the first nine months of the year, reflecting strong growth in mortgages and deposits, and boosted by the end of Covid-related customer support measures.

Sign up to the daily Business Today email

Investment banking fees and equities income posted their best nine-month performances on record. This resulted in a return on equity for the overall investment bank of 16.4%, up from 10.5% in the same period last year.

Zoe Gillespie, investment manager at Brewin Dolphin, said: “A record profit for Barclays in the third quarter is illustrative of the turnaround in fortunes the UK’s major banks have had compared to where they were this time last year. Barclays has delivered a strong set of numbers and is striking a good balance between reinvesting in its businesses and delivering returns to shareholders.

“The bank still looks one of the best positioned among its peers, with exposure to markets beyond the UK and an offering that covers retail banking, business lending, credit cards, and investment banking.”



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.