The One Churchill Place skyscraper, the headquarters of Barclays Plc, at Canary Wharf in London, United Kingdom, on Thursday, January 7, 2021.
Bloomberg | Bloomberg |
LONDON — Barclays on Thursday reported second-quarter net profit attributable to shareholders of 1.2 billion kilos ($1.54 billion), barely lower than a yr ago because the lender’s net interest income fell at its core British units.
Analysts polled by Reuters had expected attributable net profit of £1.03 billion for the period, in keeping with LSEG data, down from the £1.3 billion recorded within the second quarter of 2023.
At 8:09 a.m. London time, shares were trading 2% higher.
Barclays reported revenue of £6.3 billion within the last quarter, above forecast of £6.25 billion, and announced a share buyback program price as much as £750 million.
Barclays’ retail bank net interest income fell 4% year-on-year to £3.15 billion within the January-June period as the web interest margin narrowed to three.15% from 3.2%. Barclays’ corporate bank revenue fell 6% as lower liquidity pool revenues offset the upper rate of interest environment.
The development was higher in investment banking, where revenues rose by 10% to £3.02 billion within the second quarter.
Barclays share price.
Max Georgiou, an analyst at research firm Third Bridge, said Barclays’ investment banking revenues exceeded expectations, boding positively for the bank’s medium-term targets.
“To further execute this strategy, we expect to continue to focus on re-expanding our market share in the U.S. market,” Georgiou said.
On Thursday, Barclays also raised its goal for the group’s net interest income for the total yr (excluding the pinnacle office and investment banking divisions) from £10.7 billion to around £11 billion.
Other highlights of the outcomes were:
- Loan impairment charges remained unchanged at £400 million within the second quarter in comparison with the identical period last yr.
- The common equity tier 1 (CET1) ratio, a measure of a bank’s financial strength, was 13.6%, down from 13.8% in December 2023.
Restructuring in progress
The British bank launched a comprehensive restructuring this yr to enhance efficiency and increase profits. As a result, the corporate’s share price has risen by 52 percent thus far this yr.
The introduction of this program resulted in a net lack of £111 million within the fourth quarter of 2023, but despite a decline in revenue in comparison with the identical period last yr, the bank returned to profitability in the primary quarter.
Group Chief Executive CS Venkatakrishnan said on Thursday that the three-year plan was making “good progress”. The return on equity of 11.1 percent for the January-June period met the annual goal of over 10 percent.
“We have completed the sale of the successful Italian mortgage book, announced the sale of the German consumer lending business and are on track to complete the acquisition of Tesco Bank in November 2024,” said Venkatakrishnan.
As a part of the lender’s restructuring, the company and investment banking businesses were split into Barclays UK, Barclays UK Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank and Barclays US Consumer Bank.
